Highlights:

• Q2 results beat expectations, but Q3 guidance disappointed, sending shares down 5–8%.
• Key technical support levels are $225 and $200, with resistance near $267 and $290.
• Weak forecast raises concerns over AI monetization and broader cloud sector growth.

Salesforce’s share price declined sharply after the company issued a weaker-than-expected forecast for fiscal Q3 revenue. The move overshadowed solid Q2 earnings and renewed concerns that monetization of its AI investments is slower than anticipated, adding pressure to the broader cloud software sector.

Soft Q3 Forecast Dampens Strong Q2 Results

Salesforce reported fiscal Q2 earnings that exceeded Wall Street expectations. Adjusted earnings per share came in at $2.91, well above consensus estimates, while revenue rose 10% year-over-year to $10.2 billion. Remaining performance obligations also showed healthy growth, and the company highlighted triple-digit expansion in its Data and AI product lines.

Despite these results, the outlook weighed heavily on investor sentiment. Management guided Q3 revenue in the range of $10.24–$10.29 billion, only in line with or slightly below consensus. The market interpreted this as a signal of slower growth momentum, sparking a selloff that pushed Salesforce shares down by as much as 8% in early trading.

Key Price Levels for Investors

Technical analysis has become central to understanding the current risk profile of the stock. Analysts point to support levels around $225, which align with consolidation zones from mid-2023 through mid-2025. A deeper pullback could test the psychological threshold at $200, marking a critical level for long-term trend stability.

On the upside, resistance levels stand near $267, coinciding with prior peaks where sellers previously emerged. A further ceiling exists at approximately $290, which is tied to the 50-week moving average and recent highs. These markers outline the trading range likely to shape investor positioning in the near term.

Strategic and Macro Considerations

The cautious forecast reflects not only company-specific dynamics but also broader market conditions. Salesforce has invested heavily in its Agentforce AI platform and related initiatives, yet revenue growth from these innovations has been slower to materialize than anticipated. The company also expanded its share buyback program by $20 billion, aiming to support shareholder value, but the move failed to counteract the negative market reaction.

From a macroeconomic perspective, softer labor data in the U.S. and uncertainty around enterprise spending add layers of complexity. Cloud software providers are increasingly exposed to fluctuations in corporate investment cycles, and Salesforce’s weaker outlook highlights how sensitive the sector remains to broader demand conditions.

Outlook and What to Watch

The coming quarters will be pivotal in determining whether Salesforce can translate its AI investments into sustained revenue growth. Market participants will closely monitor adoption rates for new product offerings, the pace of large enterprise deals, and any shifts in macroeconomic indicators that influence IT spending.

For now, the technical levels at $225 and $200 serve as critical benchmarks on the downside, while recovery attempts will likely face resistance near $267 and $290. Whether Salesforce stabilizes or faces further pressure will depend on its ability to deliver tangible results from its AI strategy in a challenging global market environment.