Salesforce, Inc. (CRM) shares have declined 35.5% year to date, significantly underperforming the Zacks Internet – Software industry, which has dropped 16.1%. Major competitors like Microsoft Corporation (MSFT), Oracle Corporation (ORCL), and SAP SE (SAP) also faced declines, with YTD falls of 22.7%, 29.1%, and 32.2% respectively, highlighting a sector-wide reset due to investors reassessing the outlook for traditional software companies amidst AI and macroeconomic uncertainty.
Salesforce’s revenues grew 12% year over year in the fourth quarter of fiscal 2026, marking improvement after a period of slowing growth. The company anticipates growth of 12-13% for Q1 and 10-11% for fiscal 2027. Additionally, its AI-driven offerings contributed $2.9 billion in recurring revenue in Q4, up more than 200% year over year, indicating strong cross-sell momentum with over 60% of these deals originating from existing clients.
Currently, Salesforce’s stock trades at a forward P/E ratio of 12.76, well below the industry average of 26.31 and significantly lower than peers like Microsoft (20.30), SAP (18.90), and Oracle (17.50). Despite challenges, the company’s fundamentals, including AI advancements and improving revenue momentum, position it for potential long-term gains, earning a Zacks Rank of #3 (Hold).
