Salesforce Inc. CRM has had a difficult year. The stock has fallen 17.2% over the past 12 months, significantly underperforming the Zacks Computer and Technology sector, which has gained 31.7% during the same period.
However, Salesforce is not alone. Other major software companies, including Adobe Inc. ADBE, SAP SE SAP and Oracle Corporation ORCL, have also faced strong selling pressure. Adobe, SAP and Oracle have declined 20.5%, 28.2% and 41.8%, respectively. This suggests that investors are questioning the outlook for the broader software industry rather than simply losing confidence in Salesforce.
Salesforce One-Year Price Return Performance
AI Concerns Weigh on Salesforce Stock
The rapid development of artificial intelligence (AI), particularly agentic AI, is one of the biggest concerns facing software companies. AI agents can increasingly perform tasks with limited human involvement, raising questions about the traditional software-as-a-service model.
Investors are worried that companies could eventually need fewer software users as AI takes over more business processes. This could put pressure on subscription-based revenue models that charge customers based on the number of users.
The broader economy is adding to these concerns. High interest rates, inflation and geopolitical uncertainty have made businesses more careful about technology spending. Enterprises are taking longer to approve large software deals, creating longer sales cycles across the industry.
Salesforce is exposed to these challenges because its business depends heavily on large enterprise customers. Slower IT budgets could make it harder to win new customers and expand existing contracts.
Still, Salesforce’s recent performance suggests that the company’s core business remains resilient.
CRM’s Revenue Growth Shows Signs of Stabilizing
Salesforce’s slowing revenue growth has been a major concern for investors. As the company has grown larger, maintaining the rapid growth rates of its earlier years has naturally become more difficult.
Recent results, however, provide some reason for optimism.
First-quarter fiscal 2027 revenues increased 13.3% year over year. While this is well below Salesforce’s earlier hypergrowth levels, double-digit growth is still meaningful for a company of its size.
Management expects double-digit revenue growth for the second quarter and full fiscal 2027. These forecasts are broadly aligned with Zacks Consensus Estimates.
