Salesforce Gives Strong Forecast, Snowflake Falls Postmarket, Microsoft Slips

On this episode of Stock Movers:

- Salesforce (CRM) gave an outlook for revenue in the current period that topped analysts’ estimates, suggesting the software company is persuading customers to buy its AI tools. Revenue will be $11.1 billion to $11.2 billion in the period ending in January, the company said Wednesday in a statement. Analysts, on average, estimated $10.9 billion. Current remaining performance obligations, a measure of bookings, will increase about 15%, compared with analysts’ estimates of a 10% rise. The shares gained about 5% in extended trading after closing at $238.72 in New York. The stock has dropped 29% this year through Wednesday’s close as investors have grown concerned about AI disrupting incumbent application software makers.

- Snowflake (SNOW) gave an outlook for operating margin that fell short of analysts’ estimates, raising concerns among investors about the profitability of new AI-based tools. Adjusted operating income margin will be about 7% in the period ending in January, the company said Wednesday in a statement. Analysts, on average, projected 8.5%, according to data compiled by Bloomberg. Product revenue will be about $1.2 billion, compared with an average estimate of $1.19 billion. The shares fell as much as 7.9% in extended trading after closing at $265 in New York. The stock, which had jumped 72% this year, pared some of its losses after the Anthropic partnership was announced.

- Microsoft (MSFT) shares slid after the Information reported that the software maker has lowered expectations for getting business customers to spend money on the cloud unit’s marketplace for artificial intelligence models and agents. Several divisions at Microsoft have lowered quotas for how much salespeople are supposed to increase sales of certain AI products after many of them missed their targets in the fiscal year that ended in June, the Information reported, citing two salespeople in the Azure cloud division. The unusual shift reflects how Microsoft is compensating for companies’ resistance to pay more for AI, according to the report.

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