The market value of Salesforce (CRM) frustratingly plunged by nearly 17% in extended trading on May 29 to echo the cloud computing service company's quarterly numbers as well as its forward guidance for the rest of the year. In particular, the current quarter's projections of Salesforce management have been lower compared to Wall St consensus expectations. Adjusted equity per share (EPS) is expected within a range between $2.34 and $2.36 on revenue of $9.20 billion to $9.25 billion. Thus, both top and bottom figures clearly missed analyst pool bets, with investment houses representatives betting on EPS of $2.40 based upon revenue of $9.34 billion on average. The company's remaining performance obligations (cRPO) annual growth in constant currency was reported at 10% against the previously foreseen 12%. Subscription and support revenues for Q1 were at $8.59 billion to mark a 12% increase for the last 12 months.

As to the full fiscal year of 2025, Salesforce has only slightly corrected its expected subscription pace forecast to "around 10%" from the previous "10%+" potential. Yet, the speed and size of asset's fall seems very excessive. And this crash mostly happened due to overoptimistic mood in the recent months, when the crowd preferred to ignore signs of more or less unharried scenarios for Salesforce business instead of fast joining the AI revolutionary rally. This was probably the case when unrealistic dreams may rather lead to sad surprise and disappointment. And so, the market isn't happy to deal with smooth evolution instead of revolutionary growth. Some analysts even began to doubt the SaaS (software as a service) model of business, used by Salesforce, when cloud-based software programs just deliver all applications to end users in an internet browser.

Such conclusions seems to be premature after Q1 EPS number of $2.44 on revenue of $9.13 billion was still better in terms of money return than consensus estimates at $2.37 for EPS on revenue of $9.15 billion. EPS jumped 44% YoY, which cannot be characterized as moving ahead with slow pace. Another positive argument is that Salesforce CEOs are keeping intact their revenue guidance for the whole fiscal year of 2025. The company's mission of managing customer relationships, integrating the business segments and building applications is still in demand. CRM has been actively investing into AI features and this would pay off handsomely one day. Higher-for-longer interest rates are the same for the cloud service segment, yet the weaker forward guidance by CRM is in contrast with solid numbers from cloud giants like Amazon Web Service and Microsoft's Azure service as both are expecting higher customer spending soon. Therefore, Salesforce's cloudy income looks rather postponed for a while.

The share price of about $230 at the moment, instead of the recent $270+ highs is discounted and potentially advantageous from this point of view. All the growth of the last six months faded, and so the inertial decline may continue up to any of $200+ levels, but buying activity from current prices is already attractive to us. CRM business scaling is only waiting for its next-after-covid and proper new time for recovery and further growth.