Intuit Inc. shares declined for a second consecutive session on Thursday, falling 1.4% to $394.06 in early afternoon trading. The drop extended a broader selloff in the software sector, with the S&P 500 software index sliding 2.7%.
Market participants are increasingly focused on the tangible returns from significant artificial intelligence investments. "We see this as a 'prove it' year for AI. We need to start seeing some return on investments," stated Jack Herr, primary investment analyst at GuideStone Funds. This sentiment is pressuring established software firms like Intuit, which is in the midst of the crucial U.S. tax season for its TurboTax product.
The broader tech retreat saw peers Atlassian and Adobe lose over 2%, while CrowdStrike and Datadog dropped between 1% and 3%. Intuit's stock traded between $392.61 and $408.67, closing $5.63 below Wednesday's finish of $399.69. Wednesday itself saw a sharp 5.15% decline, putting the stock roughly 51% below its July 30 peak of $813.70.
Investor attention is now split between macroeconomic indicators and company-specific catalysts. Traders are awaiting Friday's U.S. consumer inflation report for clues on the Federal Reserve's interest rate path. Subsequently, focus will shift to Intuit's fiscal second-quarter earnings, scheduled for release after the market closes on February 26.
The company continues to push its AI strategy, recently unveiling an AI-driven construction edition for its Intuit Enterprise Suite. "That's why we're investing heavily in industry solutions, starting with construction," explained Ashley Still, EVP and general manager for mid-market at Intuit. The company has also scheduled an Investor Day for September 17 at its Mountain View headquarters.
The path forward remains challenging. A higher-than-expected inflation reading could dampen rate-cut hopes, pressuring high-valuation software stocks further. Additionally, the long-term risk remains that AI automation could encroach on core tax and accounting services, potentially threatening Intuit's pricing power.
