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CRM Stock Price Down Big As Salesforce Hit by Slowest Growth in Decades

Analyst Team trader
Updated 30 May 2024

Salesforce share price (NYSE: CRM) has taken a huge hit in the after hours trading session, as earnings hit. Markets reacted negatively to the print, with a drop of 16.02% pulling the stock back to levels not seen since November 2023. The first minutes of the premarket session has continued in the same vain, adding another 0.4% to the losses seen last night so far.

In an unprecedented shift, Salesforce is facing single-digit sales growth, with revenue projections increasing by up to 8% to reach $9.25 billion in the current quarter. The global leader in customer relationship management (CRM) solutions, is bracing for the slowest sales growth in its history. Salesforce CEO commented that for 2025 the firm is “maintaining our revenue guidance at 37.7 billion to 38 billion, growth of 8% to 9% year over year”.

This is a notable downturn for a company that has not seen such limited growth in nearly twenty years. It marks a critical juncture for Salesforce as it grapples with keeping pace in an industry increasingly dominated by artificial intelligence tools.

The headline numbers of EPS and revenue stood in contrast with one another as Salesforce beat on EPS ($2.44 against $2.38), but missed the top line revenue expectation ($9.13bn against $9.17bn). CEO Mark Benioff came out in support of the numbers, and of the developments being made in recent years on the conference call.

“in Q1, we delivered 9.13 billion in revenue, up 11% year over year, in both nominal and constant currency. Subscription support revenue grew at 12% year over year and 13% in constant currency”

Salesforce CEO Mark Benioff

While Salesforce concentrates on improving profitability, the reduced sales growth has been an emerging trend over the past year. Nevertheless, industry analysts predict that the significant revenue impact from their artificial intelligence features will not materialize until at least 2025 or 2026. The forecast for Q2 reflects this with a revenue now expected to come in between $9.2 to $9.25bn against an earlier consensus of $9.34bn. This would also reflect a dip in EPS to $2.35 from the previously expected $2.40 for Q2.


The concerns around Salesforce reflect a broader trend in technology. The pivot toward artificial intelligence tools has initiated a wave of strategic reassessment within tech companies. Investors and stakeholders alike are starting to scrutinize long-term viability and the balance between profitability and innovation more closely than ever before.

As the industry steers toward advanced technologies such as AI, Salesforce's challenge will be to evolve and adapt swiftly. Whilst the headline numbers delivered are not that bad, the recent developments serve as a cautionary tale, reminding us of the volatile nature of the tech sector and the need for agility in the face of profound industry shifts.

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The AskTraders Analyst Team features experts in technical and fundamental analysis, as well as traders specializing in stocks, forex, and cryptocurrency.