TLDR
- Salesforce stock plunged 6.9% to $241.62 during Tuesday’s trading session
- Oppenheimer’s Adobe downgrade over AI monetization concerns triggered enterprise software sell-off
- Snowflake downgraded to “Hold” by Barclays due to Amazon and Oracle competition
- Adobe fell 5.6%, ServiceNow dropped 3.6%, Microsoft down 0.9%, Oracle declined 1.6%
- Salesforce reports quarterly earnings February 25 with AI product demand under scrutiny
Salesforce experienced a sharp decline Tuesday, with shares falling 6.9% to $241.62. The drop positioned the company among the Dow’s largest losers.
The sell-off started after Oppenheimer downgraded Adobe. The analyst warned that Adobe’s AI tools weren’t converting to revenue quickly enough. That concern spread across the enterprise software landscape.
Barclays dealt another blow to the sector. The firm downgraded Snowflake to “Hold” citing aggressive competition from Amazon and Oracle. Both tech giants have been bundling AI data tools at competitive rates.
The damage extended throughout the software space. Adobe dropped 5.6% while ServiceNow fell 3.6%. Microsoft edged down 0.9% and Oracle slipped 1.6%.
Tech Budgets Under Scrutiny
DocuSign and Asana faced headwinds too. Investors questioned whether their core products were becoming commoditized.
Salesforce’s decline weighed heavily on the Dow. The stock combined with Visa to remove approximately 194 points from the index earlier in the day.
The company now trades at $241.32 per share. That’s 33% below its 52-week high of $359.95 reached in January 2025. Since the start of 2026, shares have fallen 4.9%.
Investors have been betting on Salesforce’s AI tools to drive growth. But companies are now examining every line item in their tech budgets.
Salesforce recently unveiled an upgraded Slackbot for Business+ and Enterprise+ customers. CTO Parker Harris described it as a “Porsche” and marketed it as an AI agent. The product represents the company’s entry into AI agents designed to complete tasks rather than simply respond to queries.
Market Pressure Mounts
The AI race is getting crowded. Anthropic launched Cowork, a Claude Desktop feature allowing users to point Claude toward folders for file reading or editing.
Broader market conditions added to the pressure. U.S. stocks weakened following consumer price data that aligned with forecasts. Rate-cut expectations remained mostly stable.
Oliver Pursche at Wealthspire Advisors characterized the movement as “letting the air out of the balloon” after markets reached fresh peaks.
Last December, Salesforce increased its fiscal 2026 revenue projection to $41.45 billion to $41.55 billion. The company also raised adjusted earnings guidance, pointing to robust demand for AI products.
Customer behavior presents challenges. Businesses typically spend months evaluating AI tools before signing substantial contracts. Automation scaling costs can catch them off guard, including compute bills, support requirements, and delayed enterprise-wide implementations.
The company’s February 25 earnings report looms large. Investors will parse guidance and demand indicators for AI products.
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