Despite posting strong quarterly results and unveiling a massive $50 billion share repurchase program, Salesforce’s stock tumbled in after-hours trading, shedding as much as 5%. The decline was driven by a revenue forecast for the current fiscal year that fell short of analyst expectations, coupled with growing market apprehension over AI investments within the software sector.
A Conservative Forecast Dampens Momentum
For its fiscal 2026 fourth quarter, the cloud software giant reported revenue of $11.20 billion, marking a 12% year-over-year increase and slightly surpassing market estimates. Adjusted earnings per share came in at $3.81, significantly higher than the analyst consensus of approximately $3.05. Net profit also rose to $1.94 billion, up from $1.71 billion in the prior-year period.
Looking at the full fiscal year 2026, Salesforce recorded total revenue of $41.5 billion, representing 10% growth. Operating cash flow reached $15.0 billion, with free cash flow hitting $14.4 billion.
However, the company’s guidance for the ongoing fiscal 2027 disappointed the market. Management projected revenue in the range of $45.8 billion to $46.2 billion, while analysts, on average, had anticipated around $46.1 billion. For the first quarter, the company is targeting revenue between $11.03 billion and $11.08 billion, alongside adjusted earnings per share of $3.11 to $3.13.
Market Jitters Eclipse Solid Fundamentals
The cautious outlook appears to have amplified existing investor concerns. The broader software industry faces pressure as market participants worry that corporate budgets are being redirected toward AI infrastructure at the expense of traditional business applications. Even before the earnings release, Salesforce equity had lost more than 25% of its value during the 2026 calendar year to date.
Should investors sell immediately? Or is it worth buying Salesforce?
These persistent doubts about the growth trajectory of core software businesses, combined with the conservative forecast, are likely to weigh on the share price in the near term. As of February 26, the stock was trading at €156.30, hovering close to its 52-week low of €151.16. A key challenge for Salesforce will be demonstrating in coming quarters that its high-profile AI initiatives can translate into sustainable revenue contributions.
AI Platform Shows Significant Traction
On the innovation front, Salesforce is making a substantial push into artificial intelligence. The company introduced a new metric termed “Agentic Work Units” to quantify the performance of its AI agents, revealing it has already delivered 2.4 billion such units and processed nearly 20 trillion tokens.
Its AI platform, Agentforce, is gaining customer adoption. The associated annual recurring revenue hit $800 million—a surge of 169% compared to the previous year. Since its launch, over 29,000 deals have been closed. Furthermore, Salesforce has integrated a new AI assistant into its Slack messaging application.
The coming periods will be critical for Salesforce as it attempts to balance robust fundamental performance with the need to meet elevated market expectations for its AI-driven growth.
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