What Happened?

Shares of CRM software giant Salesforce (NYSE: CRM) fell 3.8% in the afternoon session after a broader market downturn was led by technology shares as investors engaged in profit-taking at the start of the new year. 

The sell-off in the tech sector followed a strong performance in the previous year, prompting investors to secure gains. This market weakness was a continuation of a trend from the end of 2025, which saw a market decline that effectively erased the traditional year-end rally. The broader sentiment appeared to have shifted, with speculative excitement cooling around high-flying tech stocks as the market began to demand more tangible results from business models.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Salesforce? Access our full analysis report here.

What Is The Market Telling Us

Salesforce’s shares are not very volatile and have only had 6 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

The previous big move we wrote about was 18 days ago when the stock dropped 3% on the news that investors grew increasingly concerned that the billions of dollars being invested into artificial intelligence may not generate sufficient profits. 

This sentiment fueled fears of a potential "AI bubble," leading to a significant downturn in the technology-heavy Nasdaq Composite index. The selloff was intensified after chipmaker Broadcom warned that increased sales of AI systems could lead to thinner profit margins, causing its stock to tumble. Subsequently, the broader market questioned whether the massive spending on chips and data centers would produce a worthwhile return on investment. This uncertainty caused a market recalibration, with investors rotating capital out of more speculative tech stocks and into more stable assets.

Investors who bought $1,000 worth of Salesforce’s shares 5 years ago would now be looking at an investment worth $1,150.

While Wall Street chases Nvidia at all-time highs, an under-the-radar semiconductor supplier is dominating a critical AI component these giants can’t build without. Click here to access our full research report.