Salesforce Shares Fall 5.8% in Three Months Amid Broader Software Sector Weakness

Industry
โดย Zacks Investment Research·Read original
Summary · why it matters

Salesforce shares have declined 5.8% over the past three months, underperforming the Zacks Internet – Software industry's 5.7% gain. Several enterprise software names, including SAP, Adobe and Workiva, have also struggled during the same period, falling 5.1%, 8.7% and 9.9% respectively. The broad-based weakness suggests investors are reassessing the software sector rather than losing confidence in Salesforce alone. The biggest overhang is the rapid rise of artificial intelligence, particularly agentic AI, which can automate complex business tasks with minimal human intervention, prompting questions about whether the traditional software-as-a-service pricing model could face pressure over time. Despite these concerns, Salesforce is transforming into a broader enterprise AI platform, with its biggest growth engine, Agentforce, seeing annual recurring revenues surge 205% year over year to 1.2 billion dollars in the first quarter of fiscal 2027. Combined AI and Data annual recurring revenues reached 3.4 billion dollars, more than tripling from the year-ago period. First-quarter fiscal 2027 revenues increased 13.3% year over year, marking a noticeable acceleration, and management expects revenue growth of 10 to 11 percent in the fiscal second quarter and approximately 11 percent for the full fiscal year. The recent share price weakness has made Salesforce's valuation more attractive, with the stock trading at a forward 12-month price-to-earnings ratio of 11.26, well below the industry average of 26.32. While challenges remain, the recent decline appears to reflect investor sentiment more than weakening fundamentals, and for existing investors, holding the stock continues to look like the more sensible strategy.

Impact on stocks 4

Artificial Intelligence▼ · 2 stocks
Salesforce.com Inc
CRM
± Mixedrelevance

Shares fell 5.8% but fundamentals strong; AI growth and valuation attractive, mixed signals.

Cloud & Digital Infrastructure▼ · 2 stocks
SAP SE
SAP
▼ NegativeCompetitionrelevance

Mentioned as part of broader software sector weakness, with shares falling 5.1%.

Workiva Inc
WK
▼ NegativeCompetitionrelevance

Mentioned as part of broader software sector weakness, with shares falling 9.9%.

Theme Impact 3

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