Why Salesforce Stock Fell 8.5% This Morning

Core Insights - Salesforce's stock experienced a significant decline despite beating earnings estimates, indicating that investor expectations were not met [1][4]. Financial Performance - In the second quarter, Salesforce reported earnings of $2.91 per share, surpassing Wall Street's expectation of $2.78 per share, which reflects an increase of approximately 8.6% year over year [3]. - The company's revenue reached $10.2 billion, exceeding the anticipated $10.1 billion and representing an 8.7% increase [3]. Future Guidance - Management provided full-year guidance targets that are slightly above current analyst projections, indicating a "beat-and-raise" performance [4]. Investor Expectations - Investors were likely seeking stronger guidance related to Salesforce's artificial intelligence (AI) initiatives, particularly after CEO Marc Benioff announced a significant shift towards AI tools in customer support [5]. - The expectation for cost-cutting through AI was not met, as the company is redeploying customer support staff into sales and marketing roles rather than laying them off [6].