Shares of Salesforce Inc. retreated in Thursday's trading session, reflecting investor unease over the company's growth trajectory and its strategic moves in artificial intelligence ahead of next week's quarterly earnings report. The stock's decline occurred amid broader softness in the technology sector.
Market Movement and Analyst Action
Salesforce stock closed Thursday's session down approximately 1.2%, at $185.57. This followed a close at $187.79 on Wednesday. The pullback coincided with a price target reduction by analysts at UBS. The firm lowered its target on Salesforce to $200 from $260 while maintaining a Neutral rating. UBS cited feedback from customer and partner discussions, which indicated improved sentiment around the company's Agentforce AI platform but revealed no clear evidence that backlog or revenue growth rates are accelerating.
Strategic Acquisition for AI
In a move to strengthen its artificial intelligence offerings, Salesforce announced it has signed a definitive agreement to acquire Momentum, a conversational insights and revenue orchestration platform. The acquisition is designed to enhance the data ingestion and analysis capabilities of Salesforce's Agentforce 360 and Slackbot, specifically by processing unstructured data from voice and video tools like Zoom and Google Meet. Financial terms of the deal were not disclosed. The transaction is expected to close in the first quarter of Salesforce's fiscal 2027.
Steve Fisher, President and Chief Product Officer at Salesforce, stated the acquisition is about gaining "visibility and context from every meaningful interaction." Momentum CEO Santiago Suarez Ordoñez added that joining Salesforce would allow the company to "close the loop for GTM [go-to-market] teams." This marks another targeted purchase following Salesforce's agreement earlier this month to acquire Cimulate, as the company builds out its Agentforce ecosystem.
Broader Market Context
The trading environment for technology stocks was challenging on Thursday. Major indexes declined as investors expressed caution over high valuations in AI-linked equities and weakness in private-equity related shares. Among Salesforce peers, ServiceNow shares slid about 0.7%, Microsoft declined around 0.4%, while Oracle managed a gain of roughly 0.6%. Some market observers characterized the sector's weakness as an overreaction to valuation concerns.
Earnings and Investor Focus
The market's reaction sets the stage for Salesforce's upcoming fourth-quarter and full-year fiscal 2026 earnings report, scheduled for release after the U.S. market closes on Wednesday, February 25. A conference call with management is set for 5:00 p.m. ET that day. Investors are keenly focused on whether the company's substantial investment in "agentic" AI—software agents capable of taking actions for users—is translating into tangible, sustainable growth rather than remaining a demonstration of potential.
Wall Street remains generally apprehensive about whether increased corporate spending on AI is converting into revenue quickly enough for major software providers. Acquisitions like Momentum can be a double-edged sword; while they bolster technological capabilities, they can also raise questions about organic growth when investors are already seeking cleaner financial expansion.
Outlook and Potential Pressure
If Salesforce's guidance next week strikes a cautious tone, or if the early traction of its AI products fails to manifest clearly in the financial metrics, the stock could face renewed selling pressure. The company did receive a third-party endorsement this week, with Informatica from Salesforce being named a Leader in Gartner's 2026 Magic Quadrant for Augmented Data Quality Solutions. However, such recognition may provide limited offset to fundamental growth concerns ahead of the pivotal earnings announcement.
Ultimately, traders will be listening intently to management's commentary on demand trends for Agentforce and any signals of a turnaround in core growth and backlog metrics. The combination of analyst skepticism, strategic M&A, and a shaky broader tape for tech stocks has placed Salesforce firmly in the spotlight as it approaches its quarterly results.
