ServiceNow Shares Slide 33% as Salesforce Guides $11.3B Q2 Revenue
NOW•Salesforce projected fiscal Q2 revenue of $11.3B versus $11.4B consensus and reported Q1 remaining performance obligations of $67.9B against $68.9B estimates, fueling investor concerns about AI-driven growth. ServiceNow shares have declined about 33% this year, mirroring the industry slump as peers push AI tools like Agentforce toward a $1.2B run rate.
1. Salesforce Q2 Revenue Guidance Falls Short
Salesforce issued a fiscal second-quarter revenue outlook of $11.3 billion, missing analyst consensus by $100 million. The company also reported first-quarter remaining performance obligations of $67.9 billion, below the $68.9 billion forecast, underscoring investor wariness over AI-driven expansion.
2. ServiceNow Shares Reflect Industry Downturn
ServiceNow’s stock has tumbled roughly 33% year to date, closely tracking the broader application software sector’s pullback. The decline highlights growing skepticism about the sector’s ability to sustain revenue growth amid rising AI competition.
3. Agentforce Gains Traction
Agentforce, Salesforce’s AI-powered service tool, is now on pace to deliver $1.2 billion in annual revenue, up from $800 million just three months ago. Usage of AI models within the platform has more than doubled, signaling accelerating enterprise adoption.
4. Rising AI Concerns in Enterprise Software
Investors are increasingly cautious about the potential for AI to disrupt traditional software business models. This caution has led leading vendors to temper guidance despite strong AI tool adoption metrics.
