SAN FRANCISCO, February 3, 2026, 07:30 PST
Shares of Salesforce dipped over 5% Tuesday morning, slipping to $199.65. The cloud software giant remains under pressure even amid consistent upbeat chatter about its artificial intelligence offerings.
This shift is significant as investors rapidly adjust valuations of major software firms. AI features may win over users but not immediately boost revenue, and it’s that disconnect traders are racing to assess.
CNBC host Jim Cramer noted that the market is treating Salesforce and ServiceNow similarly, despite both companies “doing fabulously.” He described them as “really great” but said he’s willing to go along with the market’s verdict for now. Cramer highlighted “multiple compression,” meaning investors are valuing each dollar of earnings less than before. (Insidermonkey)
The sell-off was widespread. ServiceNow shares dropped roughly 7% in early trading. Microsoft and Oracle also slipped, fueling concerns that investors are retreating from enterprise software.
Citizens maintained a Market Outperform rating on Salesforce, setting a $405 price target in a January 27 note. They highlighted that the company’s Agentforce segment surpassed $500 million in annual recurring revenue during the fiscal third quarter, marking a 330% increase year over year, Insider Monkey reported. Annual recurring revenue measures expected subscription sales each year. (Finviz)
Trefis noted that Salesforce appears more affordable based on its price-to-sales ratio, claiming the stock trades roughly 43% lower than it did a year ago on that measure. Price-to-sales compares a company’s market cap to its yearly revenue. (Trefis)
A Seeking Alpha analysis released Tuesday noted that Salesforce’s AI “agents” are being adopted faster than revenue growth reflects, suggesting a potential upside if usage translates into billed sales. It estimated Agentforce ARR at $540 million in the fiscal third quarter, a modest portion of Salesforce’s projected $41.5 billion full-year revenue. (Seeking Alpha)
Last week, Salesforce announced it landed a $5.6 billion, 10-year IDIQ contract with the U.S. Army. This framework lets the Army place orders over time, up to that ceiling. Kendall Collins, head of Missionforce and Government Cloud, said, “From recruiting to the tactical edge, Salesforce is equipping our forces.” The company also clarified the $5.6 billion figure isn’t a guaranteed purchase amount. (Salesforce)
Salesforce reported in its latest quarterly update that Agentforce and Data 360 annual recurring revenue hit nearly $1.4 billion, backed by more than 9,500 paid Agentforce deals. CEO Marc Benioff described these segments as key “momentum drivers,” while CFO Robin Washington outlined a target of surpassing $60 billion in organic revenue by fiscal 2030. (Salesforce)
Timing is the market’s main complaint. AI features might grab pilots and headlines, yet reported revenue can lag for quarters. Meanwhile, large government contracts don’t always lead to immediate spending — sometimes orders just don’t come through.
Salesforce is set to announce its earnings on Feb. 25, Nasdaq reports, offering investors an updated view on whether its AI investments are starting to pay off. (Nasdaq)
