Salesforce’s latest quarterly results have sparked concern among investors, largely due to slower-than-expected monetisation of its AI initiatives.

In its Q3 earnings report, Salesforce projected revenue between £10.24 billion and £10.29 billion, with the midpoint just below Wall Street’s average estimate, according to LSEG data. Earlier in the week, the cloud software provider announced a $20 billion increase to its share buyback programme, bringing the total authorised repurchase amount to $50 billion.

However, the buyback was not enough to reassure investors. Shares dropped over 5 per cent in extended trading after the earnings release, with the decline deepening to nearly 7 per cent the following morning on 4 September.

Salesforce has made significant investments in AI, particularly with its Agentforce platform, which automates tasks and aims to improve margins. Despite this, investors are applying increasing pressure for returns. Last week, chief executive Marc Benioff disclosed that AI now handles between 30 and 50 per cent of the company’s work and has contributed to 4,000 job cuts in customer support. This bold shift, however, has not yet translated into accelerated revenue growth.

Melissa Otto of S&P Global’s Visible Alpha told Reuters that there is growing frustration among investors about the timeline for meaningful returns from AI. “Investors may feel a sense of frustration, especially as they contemplate the timeline for adequate returns on AI investments,” she said.

Salesforce recently acquired Informatica for $8 billion, a US-based software company specialising in data management for enterprise environments. Informatica’s products support data integration, quality, and governance, and the acquisition aims to enhance Salesforce’s database, which the company sees as critical to implementing agent AI and driving the next phase of growth.

The AI boom has also reshaped the technology labour market, with companies prioritising AI-focused roles while using automation to reduce costs. Other tech firms have similarly announced layoffs. In June, Microsoft implemented another round of job cuts, eliminating more than 300 positions in Redmond and bringing total layoffs in the state to nearly 2,300 in recent weeks. These cuts are in addition to a global workforce reduction of around 6,000 employees, or nearly 3 per cent of the company’s staff.

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