Salesforce Inc. (CRM) shares continued their downward trajectory on Thursday, falling 1.8% to $152.21 in midday trading in New York, despite the company reporting record quarterly revenue and robust growth in AI-driven recurring revenue. The stock touched a session low of $149.96 and has now declined approximately 40% for the year 2026, according to Motley Fool analyst Daniel Sparks.
The company's fiscal 2027 first-quarter results showed revenue of $11.1 billion, up 13% year-over-year, with non-GAAP operating margin of 34.8% and free cash flow of $6.6 billion. CEO Marc Benioff described the period as one of "record revenue, record deals, and cash flow." Salesforce also disclosed that annual recurring revenue from its Agentforce and Data 360 products now stands at approximately $3.4 billion.
Fin Acquisition Raises Questions
Investor sentiment has been particularly affected by Salesforce's announcement this week that it will acquire Fin—formerly known as Intercom—for approximately $3.6 billion. Fin provides an AI agent for customer service that operates across live chat, email, WhatsApp, SMS, phone, and Slack. The acquisition is expected to close in the fourth quarter of Salesforce's fiscal 2027, pending regulatory approval.
Fin CEO Eoghan McCabe stated that joining Salesforce will allow Fin to scale "far and wide" more quickly than it could independently. While the deal appears straightforward—Salesforce seeking greater control over customer-support workflows before AI-first competitors or platforms can move in—the market is focused on pricing implications. Analysts are debating whether AI agents might ultimately reduce demand for paid software seats, potentially disrupting Salesforce's core subscription model.
Wall Street Divided
RBC Capital Markets analyst Rishi Jaluria noted that sentiment around application software names looks "particularly weak," flagging that Salesforce has "a lot to integrate" following its acquisitions of Informatica, Contentful, and now Fin. Despite the bearish sentiment, some analysts remain bullish. Monness, Crespi, Hardt upgraded Salesforce to Buy from Neutral on Thursday, with analyst Brian White setting a $200 price target, calling the valuation "compelling." White dismissed concerns about generative AI negatively impacting Salesforce as "misplaced," pointing to the company's margins, cash flow, buybacks, and the growth from Agentforce and Data 360.
According to TradingView, which uses FactSet data, the average 12-month price target for Salesforce has slipped to $245.54 from $248.41, still representing approximately 58% upside from the June 17 closing price. Of 54 analysts covering the stock, 39 rate it a Buy, 13 a Hold, and two a Sell.
Bearish Voices Grow Louder
Seeking Alpha contributor Andres Veurink has placed a Sell rating on Salesforce, warning that AI costs could squeeze margins if token usage outpaces billable work. Tokens are small units of text that AI models parse, and heavier token consumption often leads to higher computing costs. This concern about unit economics—whether each AI job generates sufficient revenue to cover its own compute expenses—has become a focal point for some analysts.
The broader software sector also faced pressure, with Adobe (ADBE) losing 1.3%, ServiceNow (NOW) dropping 0.9%, and Workday (WDAY) sliding 3.1% on Thursday. These moves suggest ongoing investor uncertainty about which enterprise-software companies will successfully profit from AI and which may be left behind.
Outlook
Salesforce has already demonstrated strong growth with Agentforce, but the key question remains whether AI agents can generate incremental revenue without cannibalizing the company's traditional seat-based subscription model. The Fin acquisition could help customers deploy agents quickly, and if Salesforce establishes effective pricing, the current share price might represent a buying opportunity. However, if integration proves slow or AI units become too expensive to support, the market's current caution could prove justified.
