Salesforce (NYSE: CRM) stock took a hit this week, falling over 3.7% as AI job displacement fears spooked investors, contributing to a broader tech sector decline. The software giant has now shed 30.1% year-to-date, trading around $185 per share—well below its December 2024 peak of $369.
The broader software sector got hammered recently over concerns that AI agents could disrupt traditional SaaS economics. A dystopian blog post detailing an AI depression scenario in 2028 and new Anthropic products like "Claude Code Security" weighed on the stock. Investors are worried that if AI can replace software seats or compress pricing, enterprise software companies could face structural headwinds. But here's the plot twist: there's still little evidence of AI disruption in reports from these companies.
While fear spreads, Salesforce is actually growing its AI offerings aggressively. Agentforce ARR hit $1.4B with 114% year-over-year growth despite AI disruption fears in enterprise software. The company is betting that AI agents—autonomous software that executes tasks with minimal human direction—will be a major growth driver, not a threat. Agentforce sits at the center of investor discussions, with the key question being whether these tools can drive enough growth in renewals and expansion to move the needle on bookings and deferred revenue.
Three major Wall Street firms cut their price targets significantly, but maintained bullish ratings, suggesting the selloff has been overdone rather than fundamentally justified. Investors are looking to Salesforce's fiscal 2026 fourth-quarter results, expected after the bell on Feb. 25, which could provide clarity on whether AI adoption is actually translating to higher revenue and bookings. Analysts are expecting a 12% increase in revenue to $11.2 billion and for adjusted earnings per share to increase from $2.78 to $3.05. If Salesforce delivers strong numbers and confident guidance, the selloff could reverse quickly.