Salesforce's already brutal year just took another devastating turn. The cloud giant's stock plummeted 8% Thursday after delivering a disappointing revenue forecast that fell short of Wall Street expectations, extending its 2025 decline to a crushing 28% — making it the worst performer among large-cap tech stocks as AI transformation doubts intensify.
The carnage at Salesforce intensified Thursday as investors fled the stock after the company's latest earnings report revealed the harsh reality behind its AI transformation promises. Shares tumbled 8% in extended trading, pushing the cloud software pioneer's 2025 losses to a staggering 28% — the worst performance among major tech companies during a year when AI has supposedly revolutionized enterprise software.
The selloff erupted after Salesforce delivered fiscal third-quarter revenue guidance of $10.24 billion to $10.29 billion, slightly below the $10.29 billion analysts were expecting according to LSEG data. While the miss appears marginal, it represents a deeper crisis of confidence in the company's ability to capitalize on the AI revolution that has sent competitors soaring.
"While the investor community oozes angst over the future of SaaS, the here and now from Salesforce, while impressive at scale, is not enough to reshape the narrative," KeyBanc Capital Markets analysts wrote in their post-earnings analysis, despite maintaining a buy rating on the stock.
The disconnect between Salesforce's AI ambitions and market performance has become increasingly stark. While the company reported closing over 12,500 total deals for its Agentforce AI platform — including 6,000 paid deals — these numbers haven't translated into the explosive growth investors have seen from AI infrastructure companies like Nvidia or cloud providers like Microsoft.
CEO Marc Benioff attempted to push back against mounting skepticism during the earnings call, dismissing concerns about AI's threat to traditional software as "nonsense." "We are seeing one of the greatest transformations" in enterprise software, Benioff told analysts, adding that criticism on social media isn't "grounded in any customer truth."
But the numbers tell a different story. Salesforce's revenue grew just 10% year-over-year in the fiscal second quarter to $10.24 billion — barely cracking double-digit growth for the first time since early 2024. While the company beat analyst estimates for both revenue and earnings per share, the deceleration has spooked investors already nervous about AI's disruptive potential.
