Salesforce Stock Sinks 31% This Year Despite $25 Billion Buyback and Google AI Deal

The disconnect between corporate strategy and market sentiment has rarely been starker than at Salesforce right now. While management rolls out a massive capital return program and deepens its artificial intelligence partnership with Google Cloud, the stock has been battered to the tune of a 31% decline since January 1, closing Friday at €148.64.

A $25 Billion Vote of Confidence

At the start of the week, Salesforce’s board authorized a $25 billion share repurchase program and raised the quarterly dividend to $0.44 per share — a clear signal that leadership views the current valuation as deeply undervalued. But the bullish move was quickly overshadowed by broader sector turmoil.

The sell-off accelerated Thursday when rival software firms ServiceNow and IBM delivered disappointing quarterly results. ServiceNow flagged delayed contract closures in the Middle East and margin compression from recent acquisitions, triggering a wave of analyst downgrades across the enterprise software space. Salesforce shares briefly lost around 9% in a single session, even though the company itself had issued no negative news.

The Existential Question Hanging Over SaaS

Underlying the rout is a fundamental anxiety about how artificial intelligence will reshape software pricing. If an AI agent can autonomously handle an entire workflow, why would customers continue paying per-seat licensing fees? That question has haunted the sector, and Salesforce has been caught in the crossfire despite already shifting toward usage-based pricing models.

CEO Marc Benioff has pushed back hard against what some are calling a “SaaSpocalypse.” In a recent interview with the Wall Street Journal, he argued that data security and compliance requirements make Salesforce indispensable, regardless of how AI evolves. The company is betting that its own AI tool, Agentforce, will prove the point.

Google Cloud Partnership Goes Live

On April 22, Salesforce and Google Cloud announced an expanded partnership at Google’s Cloud Next ’26 conference in Las Vegas. The centerpiece is what they call “Agentic Interoperability” — AI agents that can operate seamlessly across both ecosystems.

Should investors sell immediately? Or is it worth buying Salesforce?

Under the arrangement, Salesforce’s Agentforce system gains access to Google Docs, Slides, and Drive. In the other direction, Google’s Gemini Enterprise can pull data from Salesforce’s CRM platform and trigger actions there. The first integrations are already rolling out: Agentforce Sales within Gemini Enterprise is in open beta, while Gemini Enterprise inside Slack is in private preview. Additional capabilities are scheduled for May 2026 and later this year.

The early results are encouraging. Some 23,000 of Salesforce’s 150,000 customers are already using Agentforce. At Pearson, the system handles order status inquiries, refunds, and access issues autonomously — processing 40% more requests without human intervention. PenFed Credit Union has seen a 40% reduction in IT ticket volume.

Technical Damage Runs Deep

Despite these operational wins, the chart tells a grim story. At €148.64, Salesforce trades roughly 25% below its 200-day moving average of €197.40. The relative strength index has fallen to 26.6, deep in oversold territory. Weakness in the marketing, commerce, and Tableau segments continues to weigh on sentiment, along with fears that AI-native startups could grab market share.

Yet Wall Street remains broadly constructive. The average price target among 35 analysts stands at $278.74, implying substantial upside from current levels. The forward price-to-earnings ratio of 14.2 sits well below the sector average of 19.2, suggesting the stock is pricing in considerable pessimism.

The Next Catalyst

All eyes are now on Salesforce’s fiscal first-quarter 2026 results, due in the coming weeks. Analysts expect earnings per share of $3.12, representing roughly 21% growth year-over-year, on revenue of $11.06 billion. The report will provide the clearest test yet of whether the company’s AI investments are translating into accelerated growth — or whether the market’s fears are justified.