"Salesforce shares are down 23% this year, putting them among the 30 worst-performing stocks in the S&P 500 Index. It's been a swift reversal for what had been a bright light in the market, soaring over 150% in 2023 and 2024 combined. The plunge has been particularly dramatic in light of the strong showings by software giants like Microsoft Corp., Oracle Corp., and Palantir Technologies Inc., all of whom are considered to be stronger in AI."
"I'm not expecting a major AI contribution to Salesforce over the next several quarters, and in the meantime there are a lot of concerns that AI can disrupt and replace the legacy software names, said Jake Seltz, who manages the Allspring LT Large Growth ETF, which owns Salesforce shares. I'm optimistic it will eventually be a winner, but it may take a couple years, and right now there's more interest in the companies that are already benefiting."
Investors are watching Salesforce's upcoming earnings for signs of AI-driven momentum or further erosion in market position. Shares have fallen 23% year-to-date after surging more than 150% across 2023 and 2024, while peers such as Microsoft, Oracle and Palantir are seen as stronger AI beneficiaries. Fiscal-second-quarter expectations call for nearly 9% revenue growth and a 23% rise in net earnings, marking faster sales expansion but extending a multi-quarter stretch below 10% growth. Management has highlighted AI initiatives like Agentforce, yet many investors expect limited AI revenue impact in the near term and persistent uncertainty about long-term trajectory.
Read at www.mercurynews.com
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