Salesforce Stock Falls 15% YTD: Should Investors Keep Holding CRM?
Salesforce, Inc. CRM has had a rough year. The stock has declined 15.1% year to date (YTD), sharply underperforming the Zacks Computer and Technology sector, which has gained 25.6% over the same period.
Still, Salesforce’s weakness should not be viewed in isolation. Several large software companies are also under pressure. YTD, shares of Adobe Inc. ADBE, Oracle Corporation ORCL and SAP SE SAP have declined 32.1%, 25.6% and 13.3%, respectively. This points to broader concerns about the software industry rather than a major loss of confidence in Salesforce alone.
Salesforce YTD Price Return Performance
AI Concerns Continue to Pressure Salesforce
The rapid rise of <a href="https://bitcomme.com/what-my-son-is-learning-from-artificial-intelligence/” title=”What My Son Is Learning From Artificial Intelligence”>artificial intelligence (AI), especially agentic AI, has become a major concern for traditional software companies. AI agents can increasingly perform tasks that once required human employees, raising questions about the future of the software-as-a-service (SaaS) business model.
Investors worry that companies could eventually need fewer software users as AI takes over more routine work. This could challenge subscription models that rely heavily on per-user pricing.
Macroeconomic conditions are an additional concern. High interest rates, inflation and geopolitical uncertainty have encouraged businesses to be more selective with technology spending. Large enterprise deals are taking longer to close, putting pressure on software companies with long sales cycles.
Salesforce faces these risks because of its large enterprise customer base. However, its latest results suggest that demand remains fairly healthy.
Salesforce’s Growth Shows Signs of Stabilizing
Salesforce generated $11.35 billion in second-quarter fiscal 2027 revenues, up 10.8% year over year. Subscription and support revenues increased 11.7% to $10.82 billion, while current remaining performance obligation (cRPO) climbed 14% to $33.5 billion.
The results are important because slowing growth has been a major concern for Salesforce. As the company has grown, maintaining its earlier hypergrowth rates has naturally become harder.
The latest numbers indicate that growth may be stabilizing. Management highlighted strong bookings, low customer attrition and improving net new annual order value as factors that could support stronger organic growth in the second half of fiscal 2027. Longer contract periods for both new deals and renewals are another positive sign.
For the third quarter, Salesforce expects revenues of $11.42-$11.50 billion, implying 11%-12% year-over-year growth. The company also raised its fiscal 2027 revenue outlook to $46.10-$46.40 billion from $45.90-$46.20 billion.
