Salesforce shares are likely to open Thursday’s session lower on Wall Street, as they traded 4% lower in pre-market trade at $183.79 on the NYSE after the cloud software provider gave a lukewarm outlook for sales growth in the new fiscal year, fueling investors’ worries that the software giant could lose out to new competitors in the age of AI, even as the company reported a healthy performance for the quarter ending January 31.
The shares declined about 5% in extended trading on Wednesday, after it published results for its fiscal fourth quarter, which ended on 31 January.
The company projects $46 billion in revenue in the fiscal year ending January 2027, trailing below Wall Street projections. It sees adjusted earnings per share of $13.11 to $13.19, marking growth of between 10% and 11%.
For the fiscal fourth-quarter results, the company reported revenue of $11.20 billion, a 12% growth over the same period last year, marking the company’s most rapid revenue expansion in years.
The growth rate was boosted by $399 million in sales from the recently completed acquisition of data software company Informatica.
Revenue for the company’s two largest product lines, sales and service, increased 8% and 7%, respectively, when adjusting for currency fluctuations. Each was just short of Wall Street estimates, Bloomberg reported.
Salesforce, the leading maker of customer management software, has been trumpeting its AI tool called Agentforce, which can complete tasks such as sales development and customer service without human supervision. Annual recurring revenue for that product passed $800 million in the fiscal fourth quarter, up from $500 million in the preceding period, as per the report.
Meanwhile, the software major announced a new $50 billion stock buyback program and increased its quarterly dividend to 44 cents per share.
Results from software-related companies could garner extra attention this earnings season, given that the S&P 500 software and services index has dropped nearly 21% so far this year as concerns over AI-related disruptions hit the sector.
While software has been one of the worst hit, financial brokerage, data analytics and legal services, real estate services, and trucking are some other sectors that have clocked heavy losses amid growing AI disruption fears earlier this year.
Salesforce shares crash 28% in 2026 on AI disruption fears
The stock has tanked 28% in less than two months of 2026 following the rollout of Anthropic’s new products, sending software and cybersecurity stocks crashing on Wall Street as investors digested the looming threat of AI tools to those business models.
Anthropic’s Claude Cowork, which rocked Wall Street last month, launched a series of connectors and plugins for the knowledge worker tool on Tuesday that enterprises can use to help “turbocharge” the capabilities of individual employees, sending IBM shares to crash 13%, its biggest intraday crash since 2000.
The five-year-old company is racing to fend off growing competition from rivals like OpenAI and Google, who have also set their sights on lucrative enterprise contracts.
(With inputs from Bloomberg, Reuters)
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