Salesforce (CRM) Stock: Adobe Downgrade Sparks Massive Software Sell-Off

TLDR

• Salesforce stock dropped nearly 7% on Tuesday, reaching $241.62, marking one of the Dow’s largest declines
• The sell-off followed Oppenheimer’s downgrade of Adobe over concerns AI tools aren’t driving revenue fast enough, triggering a broader enterprise software sector decline
• Barclays downgraded Snowflake citing intense competition from Amazon and Oracle’s bundled AI data tools
• Enterprise software stocks fell across the board with Adobe down 5.6%, ServiceNow dropping 3.6%, and Oracle falling 1.6%
• Salesforce will report earnings on February 25 after market close, with investors watching demand for AI agents and updated guidance

Salesforce shares plunged 6.9% to $241.62 during Tuesday’s afternoon trading session. The drop positioned the company as one of the Dow’s worst performers.

Salesforce, Inc., CRM

The sell-off started when Oppenheimer downgraded Adobe. The analyst warned that Adobe’s AI tools weren’t converting to sales as quickly as investors hoped. That sparked anxiety across the entire enterprise software sector.

Snowflake took a direct hit from Barclays. The firm downgraded it to “Hold” due to aggressive competition from Amazon and Oracle. These tech giants have been bundling their own AI data tools at competitive prices.

Other software names struggled too. DocuSign and Asana faced concerns that their core markets were becoming commoditized. The broader narrative shifted against high-valuation cloud stocks.

Software Sector Faces Pressure

Adobe fell 5.6% while ServiceNow dropped 3.6%. Microsoft edged down 0.9% and Oracle declined 1.6%. The weakness spread through the sector like wildfire.

Salesforce’s price drop hit the Dow hard. MarketWatch reported that Salesforce and Visa together sliced about 194 points off the index earlier in the session.

The timing creates pressure for Salesforce. Investors have been counting on the company’s new AI tools to drive growth. But companies are now scrutinizing every dollar of their tech budgets.

Salesforce recently launched a revamped Slackbot for Business+ and Enterprise+ users. CTO Parker Harris called it a “Porsche” and branded it as an AI agent. The company positioned it as part of the rush to develop AI agents that perform tasks rather than just answer questions.

Competition in the AI space is heating up. Anthropic rolled out Cowork, a feature in Claude Desktop that lets users direct Claude to folders for reading or editing files.

Market Context Weighs on Tech

The broader market showed weakness on Tuesday. U.S. stocks dipped following consumer price data that matched expectations. Rate-cut bets remained mostly unchanged.

Salesforce stock has fallen 4.9% since the start of 2026. At $241.32 per share, it trades 33% below its 52-week high of $359.95 from January 2025.

In December, Salesforce raised its fiscal 2026 revenue forecast to between $41.45 billion and $41.55 billion. The company also boosted its adjusted earnings guidance, citing strong demand for its AI products.

The challenge remains real. Customers typically spend months testing AI tools before signing larger contracts. The costs of scaling automation can surprise them, from compute bills to support demands to slow rollouts within large organizations.

Salesforce will report earnings on February 25 after the market closes. Investors will watch closely for demand signals and updated guidance on AI products.

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