Salesforce CEO Marc Benioff attends the 55th annual meeting of the World Economic Forum in Davos, Switzerland, on Jan. 23, 2025.
A bad year just got worse for Salesforce .
Following a disappointing revenue forecast in its quarterly earnings report late Wednesday, Salesforce's stock slumped nearly 5%, bringing its decline for 2025 to 27%. That's the worst performance in large-cap tech.
Revenue increased 10% in the fiscal second quarter from a year earlier, cracking double-digit growth for the first time since early 2024. Sales of $10.24 billion topped the average analyst estimate of $10.14 billion, and earnings per share also exceeded expectations.
However, for the fiscal third quarter, Salesforce said revenue will be $10.24 billion to $10.29 billion, while analysts were expecting $10.29 billion, according to LSEG.
Salesforce regularly touts its investments in artificial intelligence and the advancements in its software as a service, or SaaS, but the company hasn't been lifted by the AI boom in the same way as many of its tech peers — particularly those focused on infrastructure.
There's also a concern on Wall Street that AI is going to eat away at much of the software sector.
"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," wrote analysts at KeyBanc Capital Markets, in a report Wednesday. The analysts have a buy rating on the stock.