Salesforce Stock (CRM) Continues to Dip – Is a Retest of Lows on the Cards?

Salesforce Inc. (NYSE:CRM) is facing continued headwinds, with its stock price edging closer to a retest of recent lows. The bearish sentiment surrounding the company has intensified, leading to a year-to-date (YTD) decline of 32.16%. This dip reflects growing concerns about the company's growth trajectory, strategic decisions, and broader market conditions.

A key factor contributing to the negative sentiment is the slowing revenue growth. In the first quarter of fiscal 2026, Salesforce reported a 7.7% year-over-year increase in revenue, a significant deceleration compared to its historical double-digit growth rates. This slowdown signals potential challenges in maintaining its market position amid increasing competition and evolving customer demands. Analysts anticipate only mid-to-high single-digit growth for fiscal years 2026 and 2027, which has further weakened market confidence.

Concerns also persist regarding Salesforce's artificial intelligence (AI) strategy and its execution. Despite substantial investments in AI initiatives such as Agentforce, the company has struggled to effectively monetize these products.

While Salesforce reported earnings per share of $2.91 on revenue of $10.2 billion in the second quarter of fiscal 2025, surpassing Wall Street expectations, the stock declined by 5.62% following the announcement. The markets were reportedly disappointed by the lack of substantial cost reductions stemming from AI implementations, particularly as CEO Marc Benioff opted to reallocate customer support staff instead of implementing significant layoffs.

Leadership changes and organizational restructuring within Salesforce have added to the uncertainty. The retirement of long-time President and COO Brian Millham in February, coupled with the appointment of Robin Washington to the newly created position of Chief Operating and Financial Officer (COFO), has raised questions about the efficiency of the new leadership structure. The consolidation of roles, intended to accelerate AI initiatives, instead sparked skepticism, contributing to a subsequent 4.92% decline in the stock price.

The company's planned $8 billion acquisition of data management firm Informatica has also stirred concerns. Analysts at RBC Capital Markets downgraded Salesforce from “outperform” to “sector perform,” citing execution risks and worries that the acquisition could strain innovation in the company's core business. These concerns have added to the bearish sentiment surrounding the stock, as markets question the strategic fit and potential synergies of the deal.

Furthermore, Salesforce faces broader market headwinds affecting the technology sector. Rising anxiety over trade tensions and mixed economic signals have contributed to market skepticism. Salesforce's stock has been affected by these macroeconomic pressures, resulting in underperformance compared to key competitors like Microsoft, SAP, and Oracle, which have experienced stock price increases YTD.

The combination of slowing revenue growth, challenges in AI strategy execution, leadership changes, acquisition-related uncertainties, and broader market headwinds has collectively influenced market sentiment towards Salesforce. The continued dip in stock price suggests that a retest of lows remains a distinct possibility, reflecting ongoing market unease about the company's near-term prospects.