Why Salesforce Stock Dived by Nearly 21% in 2025

Investing trends went against Salesforce (NYSE: CRM) in 2025 -- at least until the end of the year, when an aggressive dive into next-generation artificial intelligence (AI) helped breathe life into the stock again.

That late-inning rally couldn't save the customer relationship management (CRM) specialist's stock from an overall decline across the year. By New Year's Eve, it had lost nearly 21% of its value over the 12-month stretch.

Dazed by the craze

The one trend negatively affecting Salesforce stock much of 2025 was the craze for AI titles. Investors were very eager to get their hands on nearly any company even marginally involved with the (understandably) hot technology.

Image source: Getty Images.

Companies that seemed still dependent on legacy tech were left in the dust, and Salesforce was considered by some to be a software business. That was a simplistic way to look at its operations -- after all, it has been developing its AI systems for years. Regardless, it got left behind somewhat in the great AI gold rush.

If Salesforce had posted blowout results in any of the first three quarters it reported that year, the stock probably would have performed better... but it really didn't.

Year-over-year revenue growth for the trio consistently landed in the single-digit percentages. Net income under generally accepted accounting principles (GAAP) swung wildly, meanwhile, ranging from a marginal decline to more than 51% improvement. Its key fundamentals either lightly topped or slightly missed the consensus analyst estimates.

Sentiment on Salesforce improved steadily following the company's levying of a 6% price increase for its enterprise clients in August. This demonstrated to many investors that management was proactively juicing profitability and, hence, margins.

Agent of change

A more positive stock-shaking development came toward the end of the year. In mid-October at its always splashy annual Dreamforce event, Salesforce grandly announced the launch of its latest AI platform, Agentforce 360. This new version of the system most notably focuses on agentic AI (i.e., AI that actively performs tasks, rather than the more limited assistive AI).

This should directly impact the company's fundamentals. Management set a new annual revenue target of $60 billion by fiscal 2030.

Finally, in its fourth and last quarterly earnings release, Salesforce delivered a crushing beat on the consensus analyst estimate for third-quarter fiscal 2026 profitability. Although year-over-year revenue growth (9%) was in line with previous quarters, the 35% increase in non-GAAP (adjusted) net income blasted the number far past the average analyst estimate of $2.86.

So the company ended 2025 on a high note, although that didn't ultimately save its stock price from sinking over the year.

But now that 2025 is over, Salesforce no longer looks like the software laggard some investors considered it to be in recent times. It's still growing its fundamentals admirably, and I think that raised $60 billion revenue target is achievable. I believe it's entirely reasonable to be very bullish on this stock now, particularly after the smackdown it endured last year.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Salesforce. The Motley Fool has a disclosure policy.