Salesforce stock falls over 50% on AI ‘SaaSpocalypse’ fears

Salesforce’s market value has fallen from more than $347 billion in December 2024 to about $136 billion as the stock dropped over 50%. Investors are raising concerns that AI-driven “SaaSpocalypse” scenarios could weaken per-seat licensing and slow revenue growth.

The selloff accelerated after recent corporate results and shifts in customer spending. IBM reported slower sales as customers redirected capital expenditure to servers and memory. Several large customers are building internal AI-assisted systems to replace third-party software; one company aims to save about $400 million a year by replacing inventory and maintenance systems.

In its most recent quarter, Salesforce reported revenue of $11.1 billion, up 13% year over year. The quarter included $444 million in revenue from Informatica, which Salesforce acquired for about $8 billion. Analysts have noted the company’s organic growth has slowed and that acquisitions have contributed to recent revenue gains. Past purchases include Tableau and Slack.

Analysts’ estimates for the quarter averaged roughly $11.32 billion. Street forecasts project annual revenue of about $46.1 billion for the current year and $50.4 billion the following year. Valuation metrics include a non-GAAP forward price-to-earnings ratio near 11.8, below the sector median of 24 and the company’s five-year average of 24, and a forward PEG ratio near 0.73. Those figures incorporate the revenue boost from the Informatica deal.

Salesforce has promoted new AI-led products as growth drivers. The Agentforce and related data segments reported annual recurring revenue of $3.4 billion, a roughly 200% increase, and the firm reported more than 3.8 billion Agentic Work Units deployed across Agentforce and Slack.

Technical indicators show the stock fell from a record high near $367 to a low close to $146 and remains below the 50-week exponential moving average. It is trading under indicators such as the Supertrend and below the 78.6% Fibonacci retracement level. Some analysts expect the shares could retest the year-to-date low near $146.

Investors will watch upcoming earnings, customer additions or losses, and adoption trends for Salesforce’s AI products for signs of sustained organic growth. Several firms have cut ratings or lowered growth assumptions following the company’s recent results and shifts in enterprise IT spending.