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Software stocks slump

August 24, 2012: 11:50 AM ET

Autodesk (ADSK) and Salesforce.com (CRM) both reported results after the closing bell Thursday that were viewed as disappointments. But Salesforce quickly recovered Friday morning while Autodesk continued to tumble. Shares fell more than 15%

The Autodesk news seemed to be hurting another graphics software firm as well. Adobe (ADBE), the maker of Acrobat, Photshop and Flash, was down nearly 4%. That made it the second-worst performer in the S&P 500 Friday, trailing only Autodesk.

Several traders on StockTwits were quick to defend Salesforce and equally quick to predict more pain for Autodesk.

howardlindzon: The Salesforce bears are shaking their heads once again...hard to short a stock that Wall Street loves...until it does not! $CRM (long)

ryanprociuk: More skeptical on the future of $ADSK then I am $CRM based on yesterdays earnings data point. #growth

Salesforce does still seem to have a brighter future. Analysts are predicting annual earnings increases of more than 27% a year on average for the next few years for Salesforce, compared to 16% growth for Autodesk and just 10% for Adobe. Some traders noted that new products from Autodesk and Adobe may not be living up to expectations.

jscales528: $ADSK no position but can't say I'm surprised...I draft piping for a living and Autocad has stagnated in my opinion....

PlanMaestro: Dear Adobe, you can heat my Mac all you want with the badly designed Flash ... but I still don't not need to update every 5 minutes $ADBE

But there are still some concerns about Salesforce as well, particularly its valuation and tough competition.

MercenaryMike: $CRM lowering guidance, ramping sales & marketing spend to keep ahead of $ORCL &$SAP - anyone else concerned with 97+ PE?

Great point. Oracle (ORCL) and SAP (SAP) are definitely not going to let Salesforce walk away with the enterprise market. And Salesforce shares remain exorbitantly valued.

Now it's time for my Reader Comment of The Week! I like to joke about some of my colleagues in the financial media get all worked up when the markets make the tiniest of moves ... in a low-volume August ... when there is no news. This constant need to find a reason for every miniscule blip in the Dow is silly. So that's why @MarketPlunger gets this week's honors.

Too funny. I'm sure Thiel is using all his Facebook (FB) winnings to wreak havoc on the rest of the market. Ha!

Anyway, I'm out all next week. And Best of StockTwits will also be taking a late summer hiatus. This feature will return (along with me) on Tuesday September 4. Enjoy the rest of August and Labor Day everybody. Now it's time for me to stop obsessing about stocks and FINALLY start doing some research for my upcoming fantasy football draft!

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Paul Lamonica
Paul R. La Monica
Assistant Managing Editor, CNNMoney

Paul R. La Monica is an assistant managing editor at CNNMoney. He is the author of the site's daily column, The Buzz, and also tweets throughout the day about the markets and economy @LaMonicaBuzz. La Monica also oversees the site's economic, markets and technology coverage.

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