New York, Jan 29, 2026, 12:42 EST — Regular session
Salesforce (CRM) shares dropped $14.84, or 6.5%, to $213.12 in midday trading Thursday, caught up in a broad selloff in software stocks following disappointing results from SAP and ServiceNow. The S&P 500 Software and Services index plunged 8.7%, hitting its lowest level in nine months. J.P. Morgan analysts said sentiment around software remains weak, despite lofty investor expectations. “The market is pricing a worst-case scenario that software is dead,” said Adam Turnquist, chief technical strategist at LPL Financial. (Reuters)
The drop followed investor scrutiny of Big Tech’s AI spending, with doubts rising over how fast these costs convert into revenue. Microsoft took a hit after warning of hefty AI investments and softer cloud growth, adding to the Nasdaq’s woes. “They’re starting to look under the hood,” said Max Wasserman, co-founder and senior portfolio manager at Miramar Capital. (Reuters)
Salesforce’s shift highlights just how jittery the market is about software-as-a-service, or SaaS — subscription software delivered via the cloud. With AI tools able to generate code or build apps at low cost, firms might get tougher on pricing and renewals.
SAP’s shares fell sharply in Europe following its forecast of 23% to 25% cloud revenue growth for 2026, alongside a warning that cloud backlog growth will slow compared to 2025. (Cloud backlog refers to contracted cloud business to be recognized as future revenue.) Citi analyst Balajee Tirupati said the update failed to boost sentiment across the sector. (Reuters)
ServiceNow, known for its workflow automation software, forecasted fiscal 2026 subscription revenue between $15.53 billion and $15.57 billion, beating analyst expectations. Yet, shares dipped despite the upbeat projection. Rebecca Wettemann, CEO of Valoir, highlighted that “ServiceNow is growing both organically and by acquisition,” crediting the company’s push into industry-specific workflows and customer relationship management. (Reuters)
Other enterprise software stocks took a hit as well. Atlassian fell roughly 12%, Intuit dropped nearly 8%, and Salesforce slid about 7%, according to Investopedia’s live market updates. (Investopedia)
Salesforce is steering the conversation back to growth and cash flow. In early December, it raised its full-year revenue forecast to between $41.45 billion and $41.55 billion. The company also reported that Agentforce and Data 360 annual recurring revenue, or ARR, hit nearly $1.4 billion. On top of that, Salesforce confirmed it completed the Informatica acquisition. CEO Marc Benioff described Agentforce and Data 360 as key “momentum drivers” for the business. (Salesforce Investor Relations)
Salesforce boosted its full-year revenue forecast and tweaked profit guidance in the same update, Reuters reported. The shift came as AI product adoption gained momentum. Analyst Rebecca Wettemann noted the company appears more assured about converting AI pilots into actual sales. (Reuters)
The selloff highlights the risk if customers pull back on spending or if AI features lead to price cuts rather than fresh revenue. Any indication that AI investments are driving costs up faster than sales—whether at Salesforce or its rivals—could weigh on the sector.
Salesforce’s upcoming quarterly report will be closely watched for evidence that its AI offerings are moving beyond pilots to generate steady revenue, and that sales cycles aren’t dragging on. According to Public.com, the earnings release is set for Feb. 25. (Public)
