By Juby Babu
May 27 (Reuters) – Salesforce forecast second-quarter revenue below Wall Street estimates on Wednesday, as concerns over AI-driven disruption to traditional software demand overshadowed its stronger-than-expected performance in the first quarter.
Shares of the business software provider were marginally down in volatile extended trading. They have declined nearly 33% so far this year, after falling more than 20% in 2025.
Like its peers, Salesforce is also contending with growing investor concerns that rapidly evolving AI tools could pull enterprise clients away from traditional software by taking over tasks once done by their products.
Advanced coding tools by Anthropic and OpenAI have contributed to a recent selloff in software stocks, ushering in what Wall Street is calling a “SaaSpocalypse” — a term reflecting the gloom around software-as-a-service companies.
Salesforce expects second-quarter revenue to be between $11.27 billion and $11.35 billion, below analysts’ average estimate of $11.36 billion, according to data compiled by LSEG.
“The next few quarters will be critical to Salesforce, both to show the value its core customers are getting from per-seat licenses and its Agentforce customers are getting from AI,” said Rebecca Wettemann, CEO of industry analyst firm Valoir.
Salesforce is trying to reinvent itself as an AI-agent company through its Agentforce autonomous agent platform — still a small business.
It posted an adjusted per-share profit of $3.88 during the first quarter, beating the estimate of $3.12.
Salesforce reported revenue of $11.13 billion for the quarter ended April 30, surpassing the estimate of $11.05 billion, supported by strong adoption of its AI-powered business software.
The company secured 98 new deals with over $1 million in annual contract value in the quarter, CEO Marc Benioff said on a post-earnings call.
Quarterly subscription and support revenue grew 14%, also topping expectations.
(Reporting by Juby Babu in Mexico City; Editing by Shilpi Majumdar)
