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Salesforce Stock Plummets on Weak Revenue Outlook
26 Feb
Summary
- Salesforce's 2027 revenue forecast fell short of Wall Street expectations.
- The company's stock dropped significantly due to concerns over AI spending and demand.
- Despite the outlook, Salesforce reported strong Q4 earnings and announced a $50 billion buyback.
Salesforce's stock price saw a notable dip after the company issued a weaker-than-anticipated revenue forecast for fiscal 2027. Projections for revenue now range between $45.8 billion and $46.2 billion, falling short of the $46.06 billion estimated by analysts. This outlook has intensified investor apprehension about the broader market for business software and the company's significant expenditures on AI technologies.
Despite the cautious outlook, Salesforce disclosed strong financial results for the fourth quarter. Revenue reached $11.20 billion, marking a 12% increase year-over-year, the fastest growth in two years. Adjusted earnings per share were $3.81, exceeding expectations. The company also reinforced its long-term vision by raising its 2030 revenue target to $63 billion and initiating an $50 billion share buyback program.
The company is actively integrating AI, particularly its Agentforce AI technology, to enhance customer service automation. With annual revenue from Agentforce AI surpassing $800 million, Salesforce is positioning itself for future growth. Recent strategic moves include the acquisition of Informatica, which contributed $399 million in revenue last quarter, and plans to acquire marketing firm Qualified. These developments underscore Salesforce's commitment to innovation and market expansion.
