Salesforce Results a Key Test for Software Stocks Spending on AI
- Shares slumped last quarter after guiding to slower growth
- Software stocks have underperformed other tech sectors in 2024
Salesforce’s upcoming results are due Wednesday afternoon.
Photographer: David Paul Morris/BloombergThis article is for subscribers only.
Investors have been increasingly asking when software companies will start to see a return on the investments they’ve made into artificial intelligence. Results from Salesforce Inc. could provide clarity into this key question.
While spending on AI-related hardware like chips and servers remains robust, and major companies recently affirmed AI-related capex plans, the picture has been very different for companies offering AI features and services. Software stocks have struggled in 2024, lagging far behind other areas of the technology sector amid growing impatience over when AI will manifest faster growth and improved efficiencies.