Salesforce Earnings Reveal Cracks in Core Business as AI Bets Intensify
Salesforce just reported 2025-earnings-financial-results-guidance/" class="internal-link">earnings that tell a story nobody wanted to hear. According to Yahoo Finance, the cloud software giant is watching parts of its core business weaken even as it pours resources into artificial intelligence initiatives. And that's creating real tension for investors trying to figure out whether this is a temporary stumble or something deeper.
The company's traditional revenue streams—the business segments that built Salesforce into a $300 billion enterprise—aren't keeping pace with what Wall Street expected. Specifically, segments including customer relationship management tools and other core offerings showed meaningful softness in the latest quarter. That's concerning. These aren't experimental products; they're the backbone of Salesforce's $40 billion annual revenue.
But here's what makes this complicated: the company isn't slowing down on AI. If anything, it's accelerating.
Over the past two years, Salesforce has committed billions to artificial intelligence development, integrating AI tools throughout its platform and making aggressive pushes into generative AI markets. The bet is straightforward—AI will revolutionize enterprise software and Salesforce needs to lead that charge. The problem is timing. When your core business starts faltering, investors get nervous about whether you're investing in the right things or just chasing the latest technology obsession.
So why does this matter? Because it's not just about Salesforce's stock price, though that's certainly at stake. This is a signal about broader tensions in enterprise software right now. Companies are caught between maintaining existing products that customers depend on and pivoting toward AI capabilities that might not generate revenue for months or even years.
Mark Schmulik, an analyst who covers enterprise software, noted that execution on both fronts simultaneously has proven difficult for many vendors in this space. "You can't neglect your base while you're building the future," he told Bloomberg this week.
The real question is whether Salesforce's weakness in traditional business segments reflects temporary market conditions or suggests that customers are delaying purchases while waiting for AI-enhanced versions of the same products.
And then there's the competitive angle. Salesforce isn't alone in this race—Oracle, Microsoft, and dozens of smaller players are all racing to embed AI into their offerings. If Salesforce stumbles on the transition, competitors won't wait around to capitalize.
For individual investors, this creates a fork in the road. You can either believe that Salesforce's AI investments will eventually justify the current spending and deliver outsized returns once the market matures. Or you can see this as a warning that the company's execution strategy is flawed and that weakness in core business segments signals deeper problems ahead.
The company maintained full-year guidance, which suggests management still believes in its trajectory. That's worth something. But guidance doesn't move stock prices—actual results do. And right now, the news isn't as clean as shareholders hoped.
Watch the next quarter closely. If core business weakness persists while AI revenue remains negligible, you'll know this isn't just a cyclical dip.