Salesforce stock just crashed to 3-year lows; Here’s why

The cloud-based software company Salesforce (NASDAQ: CRM) has been having a bad year in 2026, expanding its total 12-month 33.03% drop with a 32.64% year-to-date (YTD) decline.

Additionally, CRM stock’s most recent closing price of $170.85 is the lowest the equity has been in more than three years – since the $160 to $186 jump between February and March in 2023 – and the extended session rally to $171.15 has not done much to improve the situation.

While the downturn is consistent with the issues facing the overall information technology (IT) sector – the IT section of the benchmark S&P 500 index is down 3.89% YTD and some blue-chip giants such as Microsoft (NASDAQ: MSFT) are down as much as 21.12 – Salesforce is, arguably, facing even stronger, structural headwinds.

Why Salesforce stock is crashing in 2026

Specifically, the software industry has been suffering from growing competition in 2026 with the rise of artificial intelligence (AI) agents. Notably, legal services stocks suffered a major drop in early February as a tailored AI plugin was released. The pattern has only been growing more severe – and more widespread – since.

Indeed, Anthropic has been at the forefront of the developments – most recently with the Mythos tool –  as, on the one hand, Claude has been drawing increasing attention for its capabilities and, on the other hand, there has been a growing number of would-be copycats.

Overall, the trends have led many investors to suspect that software companies might soon become obsolete as automated and autonomous systems provide a more cost-effective alternative.

Why Salesforce stock could still recover in the long-term

On the flip side, some prominent Wall Street analysts, such as Wedbush’s Dan Ives, believe that the risks have been overblown and that, while Salesforce will need to make some alterations to its business model, the company’s transformation is well underway, making long-term dangers effectively trivial.

The U.S. government – a long-standing Salesforce customer – also provided some hints that the firm is far from obsolete earlier in 2026. Indeed, though multiple Washington agencies have been deepening their integration with AI, the Department of Defense – or of War – entered into a $4.7 billion agreement as recently as January.

Still, Salesforce remains in an uncomfortable position. Should it fail to adapt to the advancement and proliferation of AI, while the technology meets the bullish Wall Street and executive expectations, it could swiftly find itself with vastly diminished relevance and revenue.

Simultaneously, if the mounting concerns regarding the possibility AI has turned into a dangerous and unsustainable bubble – a fear at least temporarily backed by the delays in infrastructure buildouts – Salesforce will find itself exposed to the fallout due to the scale of investments committed to the technology, and the size of some of the main actors in the boom.

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