NextFin News - Salesforce Inc. issued a disappointing revenue forecast for the fiscal second quarter on May 27, 2026, sending its shares tumbling in after-hours trading and intensifying fears that the rise of generative artificial intelligence is disrupting the pioneer of cloud-based business software. The San Francisco-based company projected revenue for the quarter ending in July that missed analysts' estimates, signaling that enterprise customers are tightening their budgets for traditional software as they evaluate how to deploy AI. This lukewarm outlook has put intense pressure on Chief Executive Officer Marc Benioff's strategy to pivot the company toward autonomous AI agents, known as Agentforce.
The core of the disruption fear lies in Salesforce's traditional business model, which has relied on selling software subscriptions based on the number of human employees using the system. As generative AI automates customer service, sales, and marketing tasks, enterprises may require fewer human workers, directly threatening Salesforce's seat-based revenue. Benioff has sought to counter this by pricing Agentforce at a flat rate per conversation, but this consumption-based model is still in its infancy and has not yet scaled sufficiently to offset the deceleration in core software spending.
Karl Keirstead, an analyst at UBS who has historically maintained a cautious, neutral stance on the enterprise software sector due to concerns over slowing IT budgets, wrote in a note to clients following the release that the transition from seat-based pricing to consumption-based AI pricing is creating a valuation air pocket. Keirstead argued that while Salesforce is successfully building AI capabilities, the near-term slowdown in core seat growth is outpacing the financial contribution from new AI agents. His analysis suggests that the company faces a challenging transition period where traditional revenue streams decay faster than new AI models can monetize.
This cautious perspective is not a lonely one, but it does not represent a unanimous consensus on Wall Street. Other analysts view the transition as a necessary and ultimately lucrative evolution. Keith Weiss, an analyst at Morgan Stanley who has long held a more constructive, bullish view on Salesforce’s enterprise moat and its ability to navigate technological transitions, argued in a research note that the market is underestimating the monetization potential of Agentforce. Weiss suggested that charging for AI agents on a per-interaction basis could eventually expand Salesforce's average revenue per user, even if traditional seat counts flatten.
The financial results for the fiscal first quarter, which ended April 30, 2026, reflected this broader slowdown in enterprise IT spending. Salesforce's revenue grew at a modest single-digit pace, a stark contrast to the double-digit growth that defined the company for most of its history. Enterprise customers are increasingly demanding clear proof of return on investment before committing to large software contracts, leading to longer sales cycles and smaller deal sizes.
The ultimate success of Salesforce's AI pivot depends on several highly uncertain factors. Customers must be willing to trust autonomous agents with critical customer-facing roles, which carries reputational and operational risks. Furthermore, competition is intensifying from both legacy rivals like Microsoft Corp. and a wave of nimble, AI-native startups that are building CRM tools from the ground up without the legacy baggage of seat-based pricing.
For Benioff, who has spent the past two years pitching Salesforce as the ultimate AI enterprise platform, the challenge is no longer just technological, but temporal. He must prove to a skeptical Wall Street that the revenue from autonomous agents will arrive before the traditional software engine runs out of steam.
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