Salesforce Beats the Quarter but Cloudy Outlook Rains on Investor Parade
Software’s silver lining is getting a little cloudier. SalesforceCRM beat Wall Street’s first-quarter expectations with revenue up 13%, but a softer-than-expected second-quarter forecast reignited fears that AI could start chipping away at the software giant’s moat. Shares fell ~2% after hours, adding to a brutal year that’s already erased roughly a third of the stock’s value.
- Remaining performance obligations, a key forward sales gauge, came in at $67.9B versus $68.9B expected, adding to fears that AI disruption is starting to pressure growth.
- Agentforce, Salesforce’s autonomous AI platform, hit a $1.2B annualized revenue run rate, jumping 205% year-over-year and crossing the $1B mark for the first time.
AI overhang: Salesforce’s slump comes amid a broader software selloff hitting names like ServiceNowNOW and AdobeADBE, as investors worry AI agents could disrupt the traditional seat-based software model. Barclays analyst Raimo Lenschow said Agentforce still isn’t large enough to materially move the business, though executives argued adoption is accelerating. CFO Robin Washington said growth should improve in the back half, leaving investors waiting for the payoff.