Why Salesforce Stock Slumped on Tuesday
2026-07-15 00:03
•Eric Volkman •The Motley Fool
••••• •• Axe Capital view
Salesforce Slump Signals Shift in Tech Spending
IBM’s weak forecast highlights a move from software to hardware in AI investments, pressuring stocks like Salesforce.
Tuesday’s drop in Salesforce shares wasn’t a surprise once you consider IBM’s recent warning. IBM’s CEO noted that customers are diverting budgets from software to hardware—specifically servers and storage—to handle AI workloads. This shift matters to South African investors because companies like Naspers and Prosus, heavily invested in global tech and software, could also feel this squeeze if the trend continues. For the JSE, expect some volatility in the tech segment, especially where exposure to software growth stories is high. With rand weakness often tied to risk-off moods, look for USD/ZAR sensitivity when global tech wobbles. However, if AI infrastructure demand booms, the hardware focus might sharply accelerate, possibly pressuring software earnings longer than expected. this is just my opinion and not financial advice
Trim positions in Prosus and Naspers while watching USD/ZAR closely; avoid adding new South African tech exposure until the sector’s capital spending pattern clarifies.
- Prosus
- Naspers
- USD/ZAR
- AI hardware demand stalls, reversing the shift
- rand strengthens, cushioning tech selloffs
7/10
Salesforce shares fell over 2% on Tuesday as part of a broader software sector selloff triggered by IBM's weak earnings guidance. IBM CEO Arvind Krishna attributed the underperformance to customers shifting technology spending from software to hardware (servers and storage) due to AI infrastructure buildout and anticipated price increases. This trend poses headwinds for software companies like Salesforce despite their historical strength.
This article was originally published by The Motley Fool and has been adapted here for Axe Capital Trading News.
Publisher: The Motley Fool
Author: Eric Volkman
Categories: Equities, Earnings, Technology, AI, Semiconductors
Tickers: CRM, IBM
Sentiment: Negative - Stock declined 2.13% on Tuesday due to broader software sector weakness. While Salesforce itself had no direct negative news, investor sentiment turned bearish on the entire software segment following IBM's weak guidance and revelation that customers are shifting capex priorities away from software solutions toward hardware infrastructure. Company issued weak preliminary quarterly earnings with only 1% revenue growth and 5% non-GAAP net income growth, both missing analyst expectations. CEO attributed underperformance to customers prioritizing hardware spending over software due to AI buildout and supply-constrained price increases, triggering a broader software sector selloff.
Keywords: Salesforce, IBM, software stocks, earnings, AI infrastructure, technology spending, hardware vs software, market sentiment
Insights:
- CRM: Negative: Stock declined 2.13% on Tuesday due to broader software sector weakness. While Salesforce itself had no direct negative news, investor sentiment turned bearish on the entire software segment following IBM's weak guidance and revelation that customers are shifting capex priorities away from software solutions toward hardware infrastructure.
- IBM: Negative: Company issued weak preliminary quarterly earnings with only 1% revenue growth and 5% non-GAAP net income growth, both missing analyst expectations. CEO attributed underperformance to customers prioritizing hardware spending over software due to AI buildout and supply-constrained price increases, triggering a broader software sector selloff.