Highlights:

– Salesforce posts its slowest growth rate among large-cap software peers
– Analysts maintain long-term confidence despite decelerating revenue expansion
– AI integration and cost discipline could sustain earnings momentum

Salesforce Inc. has become the slowest-growing player among major software firms, a stark contrast to the sector’s broader momentum in artificial intelligence and cloud adoption. Yet despite its decelerating top-line expansion, Wall Street remains broadly supportive of the stock, citing strategic positioning and profitability gains as reasons for resilience.

Growth Deceleration Raises Questions

Salesforce’s most recent quarterly report underscored the slowdown. Revenue growth fell below 10% year-over-year, marking the weakest pace among large-cap software companies. For context, peers such as Microsoft and ServiceNow continue to post double-digit expansion, fueled by AI-driven demand and cloud migration tailwinds. The relative underperformance highlights Salesforce’s maturity in its core CRM business, where market saturation is weighing on incremental growth.

The deceleration also reflects the broader normalization across enterprise software following years of pandemic-fueled digitization. With IT budgets under scrutiny amid uncertain macroeconomic conditions, Salesforce’s dependence on recurring subscription contracts provides stability but limits the potential for sharp reacceleration.

Profitability and Market Position Offer Cushion

Despite the muted growth, Salesforce has demonstrated improving margins thanks to strict cost discipline and efficiency initiatives. Operating margins have expanded meaningfully over the past two years, bolstered by restructuring measures and rationalization of its workforce. This has reassured investors that even as revenue momentum slows, the company can deliver strong earnings growth.

Furthermore, Salesforce’s scale and entrenched position in enterprise software remain significant competitive advantages. The firm’s ecosystem of cloud-based services — spanning sales, marketing, and analytics — keeps customers locked into multi-year contracts. This stickiness underpins predictable cash flows, a factor analysts point to when justifying ongoing optimism.

AI Investments Could Reignite Momentum

A critical part of Salesforce’s forward strategy is embedding artificial intelligence across its product suite. The rollout of “Einstein Copilot” and expanded data cloud capabilities reflect management’s ambition to remain relevant in the AI era. While monetization of these initiatives is still in early stages, the company is positioning itself to capture incremental demand as enterprises look to automate workflows and deepen customer insights.

Success in AI integration could differentiate Salesforce from slower-moving competitors and gradually offset its slowing legacy growth. However, execution risks remain high, particularly given the intensity of competition from Microsoft and emerging AI-native players.

Looking ahead, investors will be watching whether Salesforce can sustain margin improvements while reigniting revenue growth through AI and cross-selling opportunities. The stock’s trajectory will likely hinge on its ability to prove that today’s slowdown is a temporary consequence of maturity rather than a structural ceiling. For global investors — including those in Israel monitoring the software sector closely — Salesforce represents a test case of how large-cap enterprise software firms adapt in a market increasingly defined by artificial intelligence.