Salesforce Tumbles Further Amid AI Worries and $27 Billion Buyback Spree
Salesforce stock has been under pressure recently due to concerns over the impact of artificial intelligence on its business model. The company's shares have tumbled 27% this year, and investors are weighing whether AI tools will help or harm Salesforce's core software offerings.
As part of its effort to address these concerns, Salesforce promoted Miguel Milano to operating chief and revealed that it had spent a record $27 billion on buybacks in the first quarter. This move comes at a sensitive time for Marc Benioff's company, which has been hit hard by the 'SaaSpocalypse' as customers increasingly turn to AI tools like 'vibe coding' to build custom software.
Benioff has argued that AI will have a positive impact on Salesforce's business, and to back this view, the company took on significant debt to buy back shares. The bonds issued carry interest rates ranging from 4.5% to 6.7%, but Benioff believes the stock is cheap enough to warrant aggressive buying.
The leadership shake-up also saw Robin Washington retain her title as chief operating and financial officer, while Srini Tallapragada left after 14 years to become a special adviser to Benioff. Rohan Kumar was tapped as chief platform and engineering officer, and the company's Agentforce AI services are designed to automate tasks.