What Happened?
Shares of CRM software giant Salesforce (NYSE:CRM) fell 6.3% in the afternoon session after a wave of competitive anxiety hit the enterprise software sector sparked by a high-profile downgrade of Adobe, triggering a broader sell-off in high-valuation cloud stocks.
A major analyst at Oppenheimer downgraded the stock, warning that Adobe's AI tools aren't boosting sales as quickly as everyone hoped. Also, Snowflake took a direct hit after Barclays downgraded it to "Hold," citing intense pressure from heavyweights like Amazon and Oracle, who aggressively bundled their own AI data tools. Simultaneously, DocuSign and Asana struggled against the narrative that their core markets were becoming commoditized.
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What Is The Market Telling Us
Salesforce’s shares are not very volatile and have only had 6 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 11 days ago when the stock dropped 3.8% on the news that a broader market downturn was led by technology shares as investors engaged in profit-taking at the start of the new year. The sell-off in the tech sector followed a strong performance in the previous year, prompting investors to secure gains. This market weakness was a continuation of a trend from the end of 2025, which saw a market decline that effectively erased the traditional year-end rally. The broader sentiment appeared to have shifted, with speculative excitement cooling around high-flying tech stocks as the market began to demand more tangible results from business models.
Salesforce is down 4.9% since the beginning of the year, and at $241.32 per share, it is trading 33% below its 52-week high of $359.95 from January 2025. Investors who bought $1,000 worth of Salesforce’s shares 5 years ago would now be looking at an investment worth $1,106.
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