Salesforce Faces Challenges Amid AI Investment Returns

Salesforce's shares saw a significant dip of nearly 7% ahead of Thursday's trading, as the company's tepid third-quarter revenue forecast stirred concerns over delayed AI investment returns. The company faces mounting pressure to justify its substantial billion-dollar AI investments amid economic uncertainty, which has led to cautious customer spending.

Salesforce has aggressively integrated AI into its suite of cloud services, launching the Agentforce platform in late 2024 to automate tasks and streamline operations. However, the projected revenue range of $10.24 billion to $10.29 billion falls just below analysts' expectations, raising eyebrows amongst investors.

To mitigate these concerns, Salesforce announced a $20 billion increase to its share buyback initiative, yet this failed to reassure investors. As shares have dipped about 24% this year, the company is pivoting towards acquisitions to bolster growth, illustrated by its $8 billion purchase of Informatica in May.

(With inputs from agencies.)