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Shares of Salesforce Inc. (CRM) are down 8% as I send you this email. The stock could have much farther to fall.

Even though the company reported earnings that beat expectations, guidance for the third quarter was disappointing. And since investors look FORWARD when deciding where to invest capital, the weak guidance is now weighing on the stock.

Software companies like CRM are facing some serious challenges in today’s AI-driven economy.

Artificial Intelligence is helping to boost productivity, allowing companies to get more done with the same number of people (or fewer people in some cases).

This may seem like a GOOD thing for companies like CRM that USE AI to help make their software more productive. But the concept is backfiring for many cloud-based software firms.

That’s because higher levels of productivity is cannibalizing existing business!

Now, corporate customers don’t need to buy as many CRM licenses. They can get the same amount of work done with fewer employees using CRM’s software. Or they can keep their existing level of service from CRM and continue to grow their business (without adding more CRM licenses and paying more.)

Either way, this trend is cutting into CRM’s business and hurting the company’s long-term profit expectations.

And CRM isn’t the only company facing this dilemma!

In fact, I’ve got my eye on three vulnerable stocks that are already trading lower as a result of this AI cannibalism trend.

This morning, I wrote up a quick report on all three stocks so you’ll have them at your fingertips. And I even included a possible options trade for each.

The report is short and sweet. No frills… Just a few facts about each company so you’ll understand why these stocks are so vulnerable.

If you’re invested in these names, I suggest taking some defensive action to protect against further losses.

And if you don’t have a position, buying put contracts for these stocks could help you generate profits from these falling stocks — and will also help to hedge your existing investments in case the broad market pulls back.

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