CRM: Salesforce Stock Tumbles 7% on Light Q3 Guidance. Earnings Were Solid.

Cloud software firm is lower by 30% from its December highs. What's weighing on the performance? Not moving fast on AI.

📉 Q3 Guidance Misses the Mark

• Salesforce CRM sank 7% in after-hours trading Wednesday despite beating on both earnings and revenue for its fiscal second quarter. The culprit?
• A softer-than-expected revenue forecast for the current three months combined with rising discontent over the company’s slow pivot into AI. Shares are now down more than 30% from December’s highs, as investors reassess Salesforce’s growth prospects in an increasingly competitive cloud and AI landscape.
• Salesforce projected third-quarter revenue between $10.24 billion and $10.29 billion, just shy of Wall Street’s consensus of $10.29 billion — a small miss, but enough to spook investors with elevated expectations.

💼 Q2 Earnings Were Actually Strong

• For a stock trading at a premium, near-perfect guidance was required to sustain sentiment, and this cautious forecast signaled slower near-term momentum.
• Despite the guidance wobble, full-year expectations remain intact, but the market reaction underscores how sensitive Salesforce’s valuation has become to forward-looking commentary.
• Adjusted earnings per share landed at $2.91, topping estimates of $2.78 and rising from $2.56 last year — a 14% year-on-year gain. Revenue came in at $10.24 billion, ahead of the expected $10.1 billion and up 10% from last year, showing that Salesforce’s core business remains resilient despite macroeconomic headwinds (you can’t tariff a software… yet).

🤖 The AI Gap Is Starting to Show

• Once the poster child of the cloud software revolution, Salesforce is struggling to define its AI strategy at a time when peers like Microsoft MSFT, Google GOOGL, and Adobe ADBE are aggressively embedding generative AI into their products.
• Salesforce has rolled out AI agents across its CRM platform — automated tools designed to complete complex workflows from a single prompt — but customer adoption has been slower than expected.
• Analysts are quick to warn that without a clearer AI monetization roadmap, Salesforce risks losing competitive edge in an enterprise software market that’s quickly pivoting to AI-driven solutions.