Key facts
- Salesforce's stock is on its longest losing streak in history.
- Investor concerns are focused on the integration of AI acquisitions and AI's disruptive potential.
- The company's growth has slowed, with sales expected to remain around 8.7% in fiscal years 2025 and 2026.
- Annual recurring revenue from AI products has surged over 400% to $440 million.
- Salesforce's stock has fallen 29% year-to-date.
- The company has increased prices on top-tier plans and seen 9% subscription revenue growth.
Salesforce's stock is currently experiencing its longest losing streak on record, a downturn attributed to investor concerns surrounding the company's integration of new AI acquisitions and the broader implications of artificial intelligence on the enterprise software market. The company is facing challenges in reigniting double-digit sales growth as its core customer relationship management (CRM) market approaches saturation.
Analysts forecast Salesforce to report $2.86 per share in adjusted earnings and $10.3 billion in revenue for its third quarter on December 3, 2025. This report will be crucial for assessing the company's AI-driven transformation and its ability to achieve renewed double-digit sales growth. While sales rose 8.7% in fiscal year 2025 and are projected to maintain that level in 2026, free cash flow has seen significant improvement, with margins increasing from 20% in 2023 to 33% in 2025. This enhanced cash flow has been utilized for dividends and share buybacks, reducing the company's share count by nearly 4%.
Salesforce has reported substantial progress in its AI initiatives, securing $440 million in annual recurring revenue from agentic AI products as of the fiscal second quarter, marking a more than 400% increase from the previous year. The company is actively promoting AI agents designed to automate complex workflows and encourage enterprise adoption. However, there is division among analysts regarding the speed at which this AI vision can be realized. Some, like Stefan Slowinski of BNP Paribas, believe Salesforce is well-positioned to overcome negative sentiment in the SaaS sector by accelerating AI tool adoption. Others remain cautious, citing enterprise customers' hesitance towards AI integration due to potential disruptions and data security concerns.
This uncertainty has contributed to a 29% decline in Salesforce's stock this year. In an effort to boost revenue growth, Salesforce increased prices on its top-tier plans in August, a move expected to help offset slower sales growth as more customers opt for AI features. Subscription revenue growth in the most recent quarter was 9% in constant currency, indicating some positive traction.
Risks to Salesforce's AI-driven growth narrative include the pace of customer adoption of AI-powered workflows and the competitive landscape. Similar to Microsoft's experience, enterprise clients are proceeding cautiously with AI integration. Salesforce faces competition from companies like C3.ai, which also offers AI platforms and generative AI tools. The upcoming earnings report will be a critical indicator of Salesforce's adaptation to the AI-driven future and its ability to demonstrate that AI is a growth driver rather than a cannibalizing force for its core business.