New York, Jan 29, 2026, 18:07 EST — After-hours
- Salesforce shares plunged roughly 6% in after-hours trading, following a steep drop during the regular session.
- Software stocks faced a broad selloff that accelerated following updates from SAP and ServiceNow, stoking concerns that AI developments might threaten subscription-based revenue models.
- Traders are now eyeing Friday’s inflation figures and Salesforce’s earnings report due late February.
Salesforce shares plunged Thursday, slipping 6.1% to $214.08 in after-hours trading.
Investors hammered U.S. software stocks following SAP’s cautious cloud forecast and a post-earnings tumble in ServiceNow, sparking fresh worries that AI could upend traditional software models. “All these software names are performing terribly because the market’s kind of in our view pricing a worst-case scenario that software is dead because AI is disrupting the space,” said Adam Turnquist, chief technical strategist at LPL Financial. Reuters
Why this matters now: Salesforce serves as a key indicator for corporate tech spending, and investors have begun lumping major software stocks into one trade. When that trade unravels, it tends to happen quickly.
Salesforce slipped 6.9%, finishing at $212.26. The stock dipped to a session low of $208.78, following a close of $227.96 on Wednesday, per Yahoo Finance.
Microsoft’s drop, triggered by what investors interpreted as a weaker cloud update, weighed heavily on the sector. John Praveen, managing director and co-CIO at Paleo Leon, noted, “Microsoft disappointed and there are some genuine concerns that AI investments will eat the software companies’ lunches.” Reuters
Earlier, Salesforce and Microsoft weighed heavily on the Dow, underscoring the outsized influence major software names still hold in key indexes. MarketWatch
Investors are focused on SaaS — software-as-a-service — the subscription model driving much of enterprise software. The concern: cheaper AI tools might handle more tasks with fewer users, pushing vendors to either justify their prices or face slower growth.
But this theme trade cuts both ways. Should the upcoming weeks reveal customers still locking in multi-year deals and shelling out for AI capabilities, the “software is dead” narrative could vanish as fast as it surfaced — sending stocks sharply higher again.
Traders are eyeing Friday’s U.S. Producer Price Index (PPI) report closely, looking for any surprises that could rattle long-duration growth stocks. Bureau of Labor Statistics
Looking ahead to next week, the U.S. jobs report on Feb. 6 will be a key macro test for risk appetite. For Salesforce, the next major event is earnings, slated for Feb. 25, per Yahoo Finance’s calendar. Bureau of Labor Statistics
