Salesforce forecasts revenue below estimates as AI disruption fears mount

Salesforce is facing renewed investor anxiety over whether artificial intelligence could disrupt its software business, even as the company tries to position itself as an AI leader. According to Bloomberg, analyst Gil Luria of D.A. Davidson said the shift to AI at Salesforce is taking longer than expected, a view that came after the company’s latest earnings update and alongside results from Snowflake.

The concern centers on Salesforce’s outlook. Bloomberg reported that the company gave a revenue forecast for the current period that came in just below Wall Street estimates, which added to fears that AI could pressure demand for traditional software products. Those worries have been building for months as investors question whether AI agents and automation tools will weaken the per-seat licensing model used by companies like Salesforce.

At the same time, Salesforce has been trying to reassure markets that it is adapting quickly enough. Reuters reported that the company has been pitching itself as an AI-agent business through its Agentforce platform, while also pointing to strong first-quarter performance. Salesforce said revenue for the quarter ended April 30 was $11.13 billion, above estimates, and CEO Marc Benioff said the company secured 98 new deals with more than $1 million in annual contract value.

Still, the market reaction suggests investors are not yet convinced. Reuters said Salesforce forecast second-quarter revenue between $11.27 billion and $11.35 billion, slightly below analysts’ average expectation of $11.36 billion, underscoring how closely traders are watching for signs that AI is either boosting the business or cannibalizing it. Industry analysts say the next few quarters will be critical to show whether Salesforce can prove the value of both its traditional software and its newer AI offerings.

The debate matters well beyond one company because Salesforce is one of the best-known names in enterprise software, and its results are being seen as a test case for whether AI will disrupt established software firms or simply become another feature they sell. Bloomberg’s reporting suggests that for now, the transition is proving slower and more complicated than executives and investors had hoped.