Salesforce drops despite Q2 beat as guidance disappoints and AI investments are yet to bear fruit

Salesforce fell more than 6% in early trading on Thursday after issuing a soft third-quarter outlook.

Second-quarter revenue rose 10% to $10.24 billion, higher than the $10.14 billion forecast, while adjusted earnings per share of $2.91 also topped the Bloomberg-compiled consensus estimates for $2.78.

But what seems to have disappointed investors was its underwhelming Q3 revenue guidance of $10.24 billion to $10.29 billion, which, at the midpoint ($10.265 billion), is just below consensus expectations of $10.28 billion.

Salesforce’s revenue growth has slowed to single digits since mid-2024, lagging other large-cap tech giants, as the company’s AI push has yet to deliver meaningful returns. The company says that its AI assistant, Agentforce, launched last October, has closed over 12,500 deals. Still, AI remains a small revenue driver: data cloud and AI annual recurring revenue jumped 120% year over year to $1.2 billion — about 3% of the ~$41 billion revenue Salesforce expects for FY 2026.

“It is early days in the adoption cycle, but we are really confident in our strategy to monetize AI,” Chief Operating and Financial Officer Robin Washington told analysts yesterday. In an interview with CNBC, the company’s CEO, Marc Benioff, said, “Our results are absolutely fantastic and our guidance is also, you know, is always appropriately conservative.”

With the latest drop, shares are down nearly 30% so far this year.