It has been a challenging week for the software and enterprise tech sector, with several major companies reporting disappointing earnings and issuing cautious outlooks.

Salesforce (NYSE: CRM), a leading cloud software vendor, saw its shares plummet nearly 20% on Thursday—the largest drop since 2004. The steep decline followed the company’s release of weaker-than-expected revenue figures and a bleak forecast. CEO Marc Benioff explained that Salesforce experienced rapid growth during the Covid-19 pandemic as companies scrambled to implement remote work solutions. Now, these customers are focused on integrating and rationalizing their tech investments. “Every enterprise software company has adjusted post-pandemic,” Benioff said during the earnings call, noting that recent reports from various businesses echo this sentiment.

Other software companies, including MongoDB (NASDAQ: MDB), SentinelOne, UiPath (NYSE: PATH), and Veeva Systems, also lowered their full-year revenue forecasts this week. The broader market reflected these struggles, with the WisdomTree Cloud Computing Fund, which tracks cloud stocks, dropping 5%—its sharpest decline since January. Major names like Paycom, GitLab, Confluent, Snowflake, and ServiceNow each saw their stock values fall by at least 10%.

Dell, which sells PCs and data center hardware, managed to increase its full-year forecast on Thursday, highlighting a growing backlog of AI servers now valued at $3.8 billion, up from $2.9 billion three months prior. However, the company’s margins are expected to shrink by 150 basis points due to the higher costs associated with these servers. Dell shares dropped 13% for the week, despite the initial optimism around its position in the AI market. Analysts from Barclays noted that expectations had been “elevated.”

Okta experienced an almost 9% drop in stock price over the week, attributed to a weaker-than-expected subscription backlog. The company’s CFO, Brett Tighe, acknowledged the macroeconomic challenges impacting their ability to secure new customers and expand existing accounts. “Macroeconomic headwinds are still out there,” Tighe stated during the earnings call.

Economic concerns were further highlighted by UiPath co-founder Daniel Dines, who reported a slowdown in business during late March and April, partially due to economic conditions. Dines noted increased hesitancy among customers to commit to multi-year deals. Similarly, SentinelOne CEO Tomer Weingarten pointed out changing buying habits and evaluation processes among customers, with SentinelOne’s stock plummeting 22% for the week following missed guidance.

The rise of generative AI has also introduced new challenges. Veeva CEO Peter Gassner discussed “disruption in large enterprises as they work through their plans for AI,” labeling generative AI as a “competing priority” for clients. Veeva’s stock fell nearly 15% this week amid concerns over spending in the latter half of the year.

Not all the news was negative, however. Zscaler saw its stock surge 8.5% on Friday after exceeding quarterly expectations and raising its full-year forecast. CEO Jay Chaudhry expressed confidence in continued strong demand for the company’s cybersecurity and data protection solutions.

This week underscored the volatility and challenges facing the software and enterprise tech sectors. As companies navigate the post-pandemic landscape, economic headwinds, changing customer priorities, and the impact of emerging technologies like AI are shaping their performance and outlook.