Salesforce Sinks 15% in a Month: Should You Hold or Exit the Stock?

Salesforce, Inc. CRM has taken a sharp hit, sliding more than 15% over the past month. This drop significantly underperforms the broader Zacks Computer – Software industry, which fell 9% during the same period. Compared to key competitors like Microsoft Corporation MSFT, SAP SE SAP and Adobe Inc. ADBE, Salesforce’s slump appears even more pronounced.One-Month Price Return PerformanceImage Source: Zacks Investment ResearchThis steep decline raises the question: Should investors cut their losses and exit, or is it worth holding onto? While the near-term headwinds are real, the long-term growth story for Salesforce remains intact, making a strong case for holding the stock.Why Did Salesforce Struggle?Salesforce’s recent decline stems from a mix of broader market weakness and company-specific concerns. A widespread sell-off in tech stocks, triggered by fears of escalating trade tensions and slowing economic growth, has put pressure on the entire sector. Companies that have benefited most from the AI boom, like Salesforce, are now experiencing valuation corrections.On the earnings front, Salesforce’s fourth-quarter fiscal 2025 results disappointed investors. Although revenues grew 7.5% year over year to $9.99 billion, it slightly missed the Zacks Consensus Estimate. More concerning was the company’s guidance, which forecasts that first-quarter and full-fiscal 2026 revenue growth is expected to slow further to just 6-8%. This marks a clear deceleration from the double-digit growth investors had grown accustomed to in previous years.Salesforce Inc. Price, Consensus and EPS Surprise Salesforce Inc. price-consensus-eps-surprise-chart | Salesforce Inc. QuoteEnterprise customers are tightening their IT budgets due to economic uncertainty, which has slowed Salesforce’s momentum. Analysts anticipate this cautious spending environment will persist, with revenue growth for fiscal 2026 and 2027 projected at 7.7% and 9.3%, respectively. While this is slower than its historical pace, Salesforce is far from a declining business — its leadership position in enterprise software remains unchallenged.Salesforce’s Market Dominance is Still FirmDespite near-term growth concerns, Salesforce remains the undisputed leader in the customer relationship management space. The company continues to outpace competitors such as Microsoft, Oracle and SAP, holding the largest market share according to Gartner’s rankings. This dominance isn’t fading anytime soon.Salesforce has built an extensive ecosystem that integrates seamlessly across enterprise applications. Its acquisitions — such as Slack and, more recently, the Own Company — demonstrate a long-term strategy of expanding its footprint beyond customer relationship management solution space into enterprise collaboration, data security and artificial intelligence (AI)-driven automation.AI is a key part of Salesforce’s growth engine. Since launching Einstein GPT in 2023, the company has embedded AI capabilities across its entire platform, allowing customers to automate workflows, enhance decision-making and improve customer interactions. As AI adoption accelerates across industries, Salesforce is positioned to capitalize on this trend.Another long-term tailwind is rising global IT spending. Gartner estimates worldwide IT spending will hit $5.61 trillion in 2025, a 9.8% year-over-year increase. Enterprise software, a key segment for Salesforce, is expected to grow even faster, with a projected 14.2% increase. Even if economic conditions slow spending in the short term, digital transformation remains a top priority for businesses, ensuring steady demand for Salesforce’s solutions.Salesforce Valuation Supports a Hold StrategyOne of the silver linings of the recent sell-off is that Salesforce’s valuation has become more reasonable. The stock currently trades at a forward P/E of 24.21, below the industry average of 27.71. While not necessarily cheap, this valuation suggests that much of the near-term pessimism is already priced in.Forward 12-Month P/E RatioImage Source: Zacks Investment ResearchGiven Salesforce’s dominant position in enterprise software, ongoing AI initiatives and strong long-term growth potential, the recent pullback does not justify an exit. While the company faces short-term headwinds, its fundamentals remain intact, making it a stock worth holding.Conclusion: Hold Salesforce Stock for NowSalesforce’s recent struggles stem from a broader market correction and concerns about slowing growth. However, the company remains a dominant force in the customer relationship management space, is deeply embedded in enterprise IT budgets, and is leveraging AI for future expansion.Its valuation has also become more attractive relative to historical levels. While near-term growth may be slower, Salesforce’s long-term investment case remains strong. For investors with a long-term view, holding the stock is the right move. CRM carries a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Microsoft Corporation (MSFT): Free Stock Analysis Report Salesforce Inc. (CRM): Free Stock Analysis Report SAP SE (SAP): Free Stock Analysis Report Adobe Inc. (ADBE): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks