Salesforce shares fall most since 2008 after weak outlook

(Times Of Update) — Salesforce Inc. shares fell the most in nearly two decades after it forecast the slowest quarterly sales growth in its history, reigniting fears that the company is being left behind in the boom. ‘artificial intelligence.

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Revenue will increase 8% to $9.25 billion in the period ending in July, the San Francisco-based company said in a statement Wednesday. This would be the first quarter of single-digit sales growth for Salesforce in its nearly two decades as a publicly traded company. The stock fell 21% to $215.40, the biggest intraday decline since July 21, 2004.

Analysts had estimated an average of $9.35 billion in revenue, according to data compiled by Times Of Update. Salesforce said earnings, excluding certain items, would be about $2.35 per share, which would also be lower than expected.

Read more: Salesforce plunges as outlook raises big concerns: Street Wrap

The outlook reinforces investors’ fears that Salesforce’s sales growth has declined over the past year as the company has focused on increasing its profits. Management has touted the potential of AI-driven software and features to increase revenue. The company also increased its buybacks and launched a dividend to try to satisfy Wall Street.

The stock had gained just 3.2% this year through Wednesday’s close. Many software companies are lagging behind others in the technology sector as the AI ​​craze has disproportionately benefited the stocks of hardware and chip companies, including Nvidia Corp. and Dell Technologies Inc. Salesforce’s outlook weighed on the software sector’s performance on Thursday, with Oracle Corp. ., ServiceNow Inc., SAP SE and others are also down. C3.ai Inc. rallied on stronger-than-expected sales outlook.

“I wonder if CIOs’ focus on AI is coming at the expense of Salesforce’s expansion,” Rishi Jaluria, an analyst at RBC Capital Markets, said in an interview on Times Of Update Television.

CEO Marc Benioff noted that the recent focus on profit and the long-term potential of artificial intelligence was positive for the company. “We are incredibly well-positioned to help businesses realize the promise of AI over the next decade,” Benioff said in the release. Most analysts don’t expect generative AI features in Salesforce apps to increase revenue until 2025 or 2026.

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Salesforce’s Data Cloud, which organizes information for analytics and artificial intelligence, is a top priority for executives and investors. The business unit comprising Data Cloud, MuleSoft and Tableau grew 24% to $1.4 billion. Analysts on average expected $1.36 billion.

Transaction strategy

Salesforce recently considered buying Informatica Inc., a maker of data organization software, highlighting its investment in that product category, before negotiations fell through. If some investors are opposed to any large-scale acquisition, particularly after the acquisition of Salesforce…