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Salesforce Stock Falls 15% YTD: Should Investors Keep Holding CRM?
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Key Takeaways
Salesforce is down 15.1% YTD, yet revenue growth, cRPO and AI adoption show encouraging signs.
CRM raised fiscal 2027 revenue guidance as Q2 revenues rose 10.8% and cRPO climbed 14%.
Salesforce's Agentforce ARR topped $1.5 billion, while its forward P/E fell below the sector average.
Salesforce, Inc. (CRM - Free Report) has had a rough year. The stock has declined 15.1% year to date (YTD), sharply underperforming the Zacks Computer and Technology sector, which has gained 25.6% over the same period.
Still, Salesforce’s weakness should not be viewed in isolation. Several large software companies are also under pressure. YTD, shares of Adobe Inc. (ADBE - Free Report) , Oracle Corporation (ORCL - Free Report) and SAP SE (SAP - Free Report) have declined 32.1%, 25.6% and 13.3%, respectively. This points to broader concerns about the software industry rather than a major loss of confidence in Salesforce alone.
Salesforce YTD Price Return Performance
Image Source: Zacks Investment Research
AI Concerns Continue to Pressure Salesforce
The rapid rise of artificial intelligence (AI), especially agentic AI, has become a major concern for traditional software companies. AI agents can increasingly perform tasks that once required human employees, raising questions about the future of the software-as-a-service (SaaS) business model.
Investors worry that companies could eventually need fewer software users as AI takes over more routine work. This could challenge subscription models that rely heavily on per-user pricing.
Macroeconomic conditions are an additional concern. High interest rates, inflation and geopolitical uncertainty have encouraged businesses to be more selective with technology spending. Large enterprise deals are taking longer to close, putting pressure on software companies with long sales cycles.
Salesforce faces these risks because of its large enterprise customer base. However, its latest results suggest that demand remains fairly healthy.
Salesforce’s Growth Shows Signs of Stabilizing
Salesforce generated $11.35 billion in second-quarter fiscal 2027 revenues, up 10.8% year over year. Subscription and support revenues increased 11.7% to $10.82 billion, while current remaining performance obligation (cRPO) climbed 14% to $33.5 billion.
The results are important because slowing growth has been a major concern for Salesforce. As the company has grown, maintaining its earlier hypergrowth rates has naturally become harder.
The latest numbers indicate that growth may be stabilizing. Management highlighted strong bookings, low customer attrition and improving net new annual order value as factors that could support stronger organic growth in the second half of fiscal 2027. Longer contract periods for both new deals and renewals are another positive sign.
For the third quarter, Salesforce expects revenues of $11.42-$11.50 billion, implying 11%-12% year-over-year growth. The company also raised its fiscal 2027 revenue outlook to $46.10-$46.40 billion from $45.90-$46.20 billion.
For a company of Salesforce’s size, sustaining double-digit revenue growth is still a solid achievement. CRM’s forecasts are broadly aligned with the Zacks Consensus Estimates.
Salesforce Sales Estimates
Image Source: Zacks Investment Research
Agentforce Likely to Change Salesforce’s Story
The most interesting part of Salesforce’s growth story is its transition from a traditional customer relationship management solution provider into a broader AI, data and enterprise software platform.
Agentforce is at the heart of this strategy. Agentforce’s annual recurring revenues (ARR) surpassed $1.5 billion in the second quarter, increasing more than 240% year over year. Combined Agentforce and Data 360 ARR reached nearly $3.9 billion, up more than 210%. Customer adoption is also accelerating. Salesforce processed 3.2 billion Agentic Work Units during the quarter, up 97% sequentially. Bookings for Agentforce One Edition and Agentforce for Apps more than doubled.
Data 360 is another important growth engine. The platform processed 104 trillion records during the quarter, up 355% year over year. Records processed through Zero Copy jumped 731% to 82 trillion.
Slack is also gaining momentum, with its fastest quarterly net new annual order value growth since Salesforce acquired the business. Slackbot users increased more than 150% sequentially. The Informatica acquisition adds another layer to the strategy. Informatica contributed $456 million to second-quarter revenues, while its subscription and support revenues were $440 million. Salesforce expects Informatica to contribute slightly more than three percentage points to fiscal 2027 revenue growth.
These initiatives suggest that Salesforce is not simply trying to defend its traditional customer relationship management business against AI. Rather, it is attempting to make AI a new growth engine.
CRM’s Valuation Is Becoming More Appealing
Salesforce’s valuation also provides some support for the stock. CRM currently trades at about 13.94 times forward 12-month earnings, below the sector average of 21.51 times.
Salesforce Forward 12-Month P/E Ratio
Image Source: Zacks Investment Research
The valuation also compares favorably with several major peers. SAP and Oracle trade at forward P/E multiples of 22.73 and 15.94, respectively, while Adobe trades at 8.75 times forward earnings. Adobe remains cheaper, but Salesforce offers a more compelling combination of improving growth, strong cash-generating potential and rapid expansion in AI-related businesses. The lower valuation gives investors some cushion if growth continues to stabilize.
Final Take: Hold Salesforce Stock for Now
Salesforce’s 15.1% YTD decline certainly looks disappointing, but the stock’s weakness needs to be considered alongside the broader software-sector selloff.
The company’s underlying business is showing encouraging signs. Revenue growth is stabilizing, cRPO remains strong, and Agentforce and Data 360 are expanding rapidly. At the same time, CRM’s valuation has become much more reasonable.
The risks are still significant. Agentic AI could disrupt traditional SaaS models, enterprise technology spending could remain cautious, and Salesforce still needs to prove that strong AI adoption will translate into sustained revenue and earnings growth.
For now, the risk-reward balance looks reasonable for existing shareholders. Investors should hold Salesforce stock rather than sell after the recent decline. New investors, however, may want to wait for clearer evidence that Agentforce can become a meaningful and durable contributor to Salesforce’s overall growth.
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Salesforce Stock Falls 15% YTD: Should Investors Keep Holding CRM?
Key Takeaways
Salesforce, Inc. (CRM - Free Report) has had a rough year. The stock has declined 15.1% year to date (YTD), sharply underperforming the Zacks Computer and Technology sector, which has gained 25.6% over the same period.
Still, Salesforce’s weakness should not be viewed in isolation. Several large software companies are also under pressure. YTD, shares of Adobe Inc. (ADBE - Free Report) , Oracle Corporation (ORCL - Free Report) and SAP SE (SAP - Free Report) have declined 32.1%, 25.6% and 13.3%, respectively. This points to broader concerns about the software industry rather than a major loss of confidence in Salesforce alone.
Salesforce YTD Price Return Performance
Image Source: Zacks Investment Research
AI Concerns Continue to Pressure Salesforce
The rapid rise of artificial intelligence (AI), especially agentic AI, has become a major concern for traditional software companies. AI agents can increasingly perform tasks that once required human employees, raising questions about the future of the software-as-a-service (SaaS) business model.
Investors worry that companies could eventually need fewer software users as AI takes over more routine work. This could challenge subscription models that rely heavily on per-user pricing.
Macroeconomic conditions are an additional concern. High interest rates, inflation and geopolitical uncertainty have encouraged businesses to be more selective with technology spending. Large enterprise deals are taking longer to close, putting pressure on software companies with long sales cycles.
Salesforce faces these risks because of its large enterprise customer base. However, its latest results suggest that demand remains fairly healthy.
Salesforce’s Growth Shows Signs of Stabilizing
Salesforce generated $11.35 billion in second-quarter fiscal 2027 revenues, up 10.8% year over year. Subscription and support revenues increased 11.7% to $10.82 billion, while current remaining performance obligation (cRPO) climbed 14% to $33.5 billion.
The results are important because slowing growth has been a major concern for Salesforce. As the company has grown, maintaining its earlier hypergrowth rates has naturally become harder.
The latest numbers indicate that growth may be stabilizing. Management highlighted strong bookings, low customer attrition and improving net new annual order value as factors that could support stronger organic growth in the second half of fiscal 2027. Longer contract periods for both new deals and renewals are another positive sign.
For the third quarter, Salesforce expects revenues of $11.42-$11.50 billion, implying 11%-12% year-over-year growth. The company also raised its fiscal 2027 revenue outlook to $46.10-$46.40 billion from $45.90-$46.20 billion.
For a company of Salesforce’s size, sustaining double-digit revenue growth is still a solid achievement. CRM’s forecasts are broadly aligned with the Zacks Consensus Estimates.
Salesforce Sales Estimates
Image Source: Zacks Investment Research
Agentforce Likely to Change Salesforce’s Story
The most interesting part of Salesforce’s growth story is its transition from a traditional customer relationship management solution provider into a broader AI, data and enterprise software platform.
Agentforce is at the heart of this strategy. Agentforce’s annual recurring revenues (ARR) surpassed $1.5 billion in the second quarter, increasing more than 240% year over year. Combined Agentforce and Data 360 ARR reached nearly $3.9 billion, up more than 210%. Customer adoption is also accelerating. Salesforce processed 3.2 billion Agentic Work Units during the quarter, up 97% sequentially. Bookings for Agentforce One Edition and Agentforce for Apps more than doubled.
Data 360 is another important growth engine. The platform processed 104 trillion records during the quarter, up 355% year over year. Records processed through Zero Copy jumped 731% to 82 trillion.
Slack is also gaining momentum, with its fastest quarterly net new annual order value growth since Salesforce acquired the business. Slackbot users increased more than 150% sequentially. The Informatica acquisition adds another layer to the strategy. Informatica contributed $456 million to second-quarter revenues, while its subscription and support revenues were $440 million. Salesforce expects Informatica to contribute slightly more than three percentage points to fiscal 2027 revenue growth.
These initiatives suggest that Salesforce is not simply trying to defend its traditional customer relationship management business against AI. Rather, it is attempting to make AI a new growth engine.
CRM’s Valuation Is Becoming More Appealing
Salesforce’s valuation also provides some support for the stock. CRM currently trades at about 13.94 times forward 12-month earnings, below the sector average of 21.51 times.
Salesforce Forward 12-Month P/E Ratio
Image Source: Zacks Investment Research
The valuation also compares favorably with several major peers. SAP and Oracle trade at forward P/E multiples of 22.73 and 15.94, respectively, while Adobe trades at 8.75 times forward earnings.
Adobe remains cheaper, but Salesforce offers a more compelling combination of improving growth, strong cash-generating potential and rapid expansion in AI-related businesses. The lower valuation gives investors some cushion if growth continues to stabilize.
Final Take: Hold Salesforce Stock for Now
Salesforce’s 15.1% YTD decline certainly looks disappointing, but the stock’s weakness needs to be considered alongside the broader software-sector selloff.
The company’s underlying business is showing encouraging signs. Revenue growth is stabilizing, cRPO remains strong, and Agentforce and Data 360 are expanding rapidly. At the same time, CRM’s valuation has become much more reasonable.
The risks are still significant. Agentic AI could disrupt traditional SaaS models, enterprise technology spending could remain cautious, and Salesforce still needs to prove that strong AI adoption will translate into sustained revenue and earnings growth.
For now, the risk-reward balance looks reasonable for existing shareholders. Investors should hold Salesforce stock rather than sell after the recent decline. New investors, however, may want to wait for clearer evidence that Agentforce can become a meaningful and durable contributor to Salesforce’s overall growth.
Salesforce currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.