Salesforce stock drops 8% despite $63
Salesforce shares fell for a fourth consecutive session, dropping over 8%, even after the company set a fiscal 2030 revenue target above analyst estimates.
Salesforce Inc. Shares fell 2% to $237.92, extending their decline for a fourth straight session and bringing total losses to more than 8%. The drop occurred despite the company announcing a long-term revenue target that exceeded Wall Street's expectations.
Salesforce has set a revenue target of $63 billion for the fiscal year ending January 2030. According to Bloomberg data, this surpasses the average analyst estimate of $61.4 billion. The company's chief operating and financial officer, Robin Washington, presented the outlook during its annual conference.
UBS adjusts outlook
Brokerage UBS raised its price target for Salesforce to $260 from $240 while maintaining a Neutral rating on the stock. However, the firm lowered its revenue growth estimate for fiscal 2028. UBS analysts indicated that progress toward the 2030 target could be "more back-end loaded than previously expected," meaning a greater portion of the growth may occur later in the forecast period.
In a note, a UBS analyst wrote: We spent two days at Salesforce’s big Dreamforce conference in SF, talking to customers about the new AIforce offering and to Salesforce management about how it will be monetized. We are Neutral-rated. The brokerage sees potential for the AIforce product to increase platform usage but believes its premium pricing could restrict near-term adoption.
Investor concerns and AI competition
Investors are focused on whether Salesforce can maintain growth as artificial intelligence reshapes the software industry. The company has been highlighting its efforts to incorporate AI into its platform, including a partnership with AI startup Anthropic PBC. This collaboration has helped ease some concerns about direct competition from AI-focused companies.
Pricing, product adoption, execution, and broader technology valuations are also weighing on market sentiment. A recent global system outage during the Dreamforce conference, which caused intermittent errors and access delays for customers, put additional attention on platform reliability.
Market and valuation pressures
The broader market backdrop has been unfavorable for high-growth technology stocks. Elevated US Treasury yields have contributed to lower valuation multiples across the sector. Higher discount rates reduce the present value assigned to future cash flows, pressuring software valuations even when companies report solid operating performance.
Despite the recent slide, Salesforce stock has recovered 67% from its low in June 2022. It remains down 5.4% for the year so far. According to the source, InvestingPro's analysis indicates the shares appear undervalued based on its Fair Value calculations. The stock currently trades with a P/E ratio of 22.7 and a PEG ratio of 0.36.
The source, LiveMint, attributes the views and recommendations mentioned to individual analysts or broking companies.
