Salesforce (NYSE:CRM) shares fell in after-hours trading late Wednesday despite stronger-than-expected quarterly results beating Wall Street estimates, as investors questioned the scale of its AI pivot and a softer revenue outlook.
The CRM stock slipped nearly 2% in overnight trading, extending a year-to-date decline of more than 30%.
The San Francisco-based software company reported first-quarter revenue of $11.13bn, up 13% from a year earlier, while adjusted earnings came in at $3.88 a share, comfortably ahead of Wall Street expectations. Net income rose to $2.11bn from $1.54bn a year ago.
Yet Salesforce projected Q2 revenue of between $11.27bn and $11.35bn, slightly below analysts’ forecasts, sending the stock lower in extended trading. Investors remain wary that advances in generative AI and autonomous software agents could weaken demand for traditional SaaS products, fuelling what some investors have dubbed the “SaaSpocalypse”.
CEO dismisses fears of "SaaSpocalypse"
Chief executive Marc Benioff dismissed those fears, arguing that AI would strengthen rather than destroy enterprise software businesses. He pointed to growing demand for Salesforce’s Agentforce platform, which allows companies to deploy AI agents for customer service and workflow tasks.
Salesforce said annual recurring revenue from Agentforce and its Data 360 products had climbed to nearly $3.4bn. The company also signed 98 deals worth more than $1m in annual contract value during the quarter.
Benioff has sought to reposition Salesforce as an AI-first company after the stock lost roughly a third of its value this year amid doubts over whether AI could erode the economics of seat-based software subscriptions. Analysts said the coming quarters would be critical in proving whether Agentforce can become a meaningful growth engine rather than a defensive response to industry disruption.
Outlook
Salesforce’s results highlight the tension between short-term investor caution and long-term management optimism. While the company has delivered on earnings and accelerated its AI offerings, Wall Street remains unconvinced that these gains can offset structural challenges in the SaaS sector. The coming quarters will test whether Agentforce’s momentum can translate into sustained growth and restore confidence in CRM’s trajectory.
