Why Salesforce stock is already down 10% this year

Core Viewpoint - Salesforce's stock is experiencing a significant decline, dropping approximately 10% year-to-date, primarily due to concerns over competition from AI technologies like OpenAI's ChatGPT [1] Group 1: Stock Performance - Salesforce shares fell 24% in 2025, contrasting with a 14% rise in Microsoft shares and a 36% increase in the Nasdaq Composite [2] - The stock is currently the worst performer in the Dow Jones Industrial Average [1] Group 2: Analyst Insights - JP Morgan analyst Mark Murphy indicated that Salesforce is in a complex transition period lasting 12-18 months, with internal metrics stabilizing but not necessarily translating into immediate improvements in revenue and other key metrics [2] - Murphy predicts that Salesforce shares will not rebound until the second half of the year [3] Group 3: Company Initiatives - Salesforce is actively working to improve its stock performance, including showcasing its AI initiative, Agentforce, at the Dreamforce event, which has reportedly driven productivity for clients like PepsiCo and Dell [3] - The company raised its fiscal 2026 revenue and adjusted profit forecasts in December [3] Group 4: Financial Metrics - Annual recurring revenue (ARR) for Agentforce surpassed half a billion dollars in the third fiscal quarter, marking a more than fourfold increase from the previous year [4] Group 5: Leadership and Relationships - CEO Marc Benioff has been strengthening ties with the Trump administration, as Salesforce conducts significant business with the government [4] - Benioff's controversial comments regarding deploying National Guard troops in San Francisco were perceived as supportive of Trump, although he later moderated his stance [5] Group 6: Market Challenges - The stock remains difficult to buy, even at a discount, until Salesforce demonstrates profitability from Agentforce and meets its ambitious FY30 guidance [6] - The software sector is undergoing a valuation reset due to the impact of AI, complicating the achievement of optimistic guidance [6]