Salesforce executive exits help push stock to its lowest point since March 2020
Marc Benioff, co-founder and chief executive officer of Salesforce.com Inc., speaks during the WSJDLive Global Technology Conference in Laguna Beach, California, U.S., on Wednesday, Oct. 26, 2016. The conference brings together an unmatched group of top CEOs, founders, pioneers, investors and luminaries to explore tech opportunities emerging around the world.
Patrick T. Fallon | Bloomberg | Getty Images
Turbulence in the upper ranks at Salesforce isn’t sitting well with Wall Street.
On Monday, the company announced the departure of Slack CEO Stewart Butterfield, who joined Salesforce last year as part of its biggest acquisition ever. Last Wednesday, Salesforce co-CEO Bret Taylor, who orchestrated the Slack deal, said he was leaving —exactly a year after getting promoted to share the top job with Marc Benioff.
In the three trading days since the Taylor news landed alongside Salesforce’s third-quarter earnings report, the stock has had two of its three worst days of the year, plunging 8.3% and 7.4%, respectively. Salesforce has now lost 47% of its value for the year, compared to the Nasdaq’s 28% drop, and is trading at its lowest since March 2020, the early days of the Covid-19 pandemic.
Taylor, who joined Salesforce in 2016 through the acquisition of his startup Quip, said he’d “decided to return to my entrepreneurial roots.” Benioff said on the earnings call, “We have to let him be free, let him go, and I understand, but I don’t like it.”
Butterfield made it clear that he’s leaving for different reasons.
“I’m not going to do anything entrepreneurial,” Butterfield wrote in a Slack message that was viewed by CNBC. “As hackneyed as it might sound, I really am going to spend more time with my family (as well as work on some personal projects, focus on health and generally put time into those things which [are] harder to do when one is leading a large organization).”
While Taylor and Butterfield are the highest-profile exits, they’re far from alone among Salesforce’s executive ranks.
Last month, Salesforce said Gavin Patterson, the president and strategy chief, would be leaving in January, and on Thursday Mark Nelson, president and CEO of Salesforce’s Tableau product, tweeted that it was his last day.
Along with Butterfield, Slack is losing product chief Tamar Yehoshua and Jonathan Prince, senior vice president in charge of marketing, brand and communications, people familiar with the matter previously told CNBC. Noah Weiss, senior vice president of product at Slack, will succeed Yehoshua, Butterfield said in a Slack message. Butterfield is being succeeded by Lidiane Jones, an executive vice president at Salesforce who joined in 2019.
Salesforce’s three-day plunge
CNBC
‘Two elephants in the room’
Slack was a pandemic-inspired acquisition. With workers forced to communicate remotely, Slack’s popular chat app blew up. In a series of tweets on March 25, 2020, Butterfield said the company had experienced “early signs of a surge in teams created and new paid customers unlike anything we had ever seen,” adding that the shift from email to chat channels, “which we believed to be inevitable over 5-7 years just got fast-forwarded by 18 months.”
Salesforce was so jazzed about Slack’s expansion that it paid over $27 billion for the company at a forward price-to-sales ratio of 24, one of the highest multiples ever in software. Taylor’s name was all over the deal, even though he wasn’t yet co-CEO. Taylor reached out to Butterfield multiple times in August and September 2020 about a possible acquisition, and the two negotiated throughout the process, which culminated in an agreement announced on Dec. 1 of that year, according to a filing with the SEC.
Salesforce’s purchase of Slack closed in July 2021, and its stock peaked four months later at almost $310. Since then, it’s lost 57% of its value, closing on Monday at $133.93.
Like its high-valued tech peers, Salesforce has been hurt this year by soaring inflation and rising interest rates, which have pushed investors into parts of the market deemed safer in a slowdown. Salesforce’s results haven’t helped. Last week, the company reported third-quarter revenue growth of 14%, the slowest expansion for any period since the company’s IPO in 2004. Its forecast for the fourth quarter is for growth of 8% to 10%.
In a break from third-quarter tradition, Salesforce neglected to provide guidance for its next fiscal year.
Analysts at Guggenheim wrote in a report that there were “two elephants in the room.” The first was omitting guidance for the coming year.
“The second elephant in the room is why Bret Taylor decided to give up his high-profile co-CEO and vice chair position after only a year,” wrote the Guggenheim analysts, who have the equivalent of a hold rating on the stock. The analysts reminded clients that three years ago, Keith Block resigned as co-CEO after 18 months on the job and wrote that “the company seems to have struggled since.”
After Taylor’s announcement last week, Wedbush analysts wrote that, “the Street will view this as a shocker with Taylor one of the mainstays in the CRM strategy.”
A Salesforce spokesperson declined to comment beyond reiterating a statement the company sent earlier regarding Butterfield’s departure.
On Thursday, Wolfe Research downgraded Salesforce stock to the equivalent of hold from a buy. They wrote that the company is moving into “a new and difficult chapter” after execution errors, big-name departures and slowing revenue growth.
The only day in 2022 that Salesforce’s stock has been hit harder than it was Thursday or Monday was at the very beginning of the year. On Jan. 5, UBS downgraded Salesforce and Adobe, telling clients that enterprise tech spending was pulled forward by the pandemic, leading to slower continued growth for the two companies.
WATCH: Salesforce shares under pressure after co-CEO Bret Taylor steps down
Beta Technologies shares surged more than 9% after air taxi maker Eve Air Mobility announced an up to $1 billion deal to buy motors from the Vermont-based company.
Eve, which was started by Brazilian airplane maker Embraer and is now under Eve Holding, said the manufacturing deal could equal as much as $1 billion over 10 years. The Florida-based company said it has a backlog of 2,800 vehicles.
Shares of Eve Holding gained 14%.
Eve CEO Johann Bordais called the deal a “pivotal milestone” in the advancement of the company’s electric vertical takeoff and landing, or eVTOL, technology.
“Their electric motor technology will play a critical role in powering our aircraft during cruise, supporting the maturity of our propulsion architecture as we progress toward entry into service,” he said in a release.
Mateusz Slodkowski | SOPA Images | Lightrocket | Getty Images
Amazon’s cloud unit on Tuesday announced AI-enabled software designed to help clients better understand and recover from outages.
DevOps Agent, as the artificial intelligence tool from Amazon Web Services is called, predicts the cause of technical hiccups using input from third-party tools such as Datadog and Dynatrace. AWS said customers can sign up to use the tool Tuesday in a preview, before Amazon starts charging for the service.
The AI outage tool from AWS is intended to help companies more quickly figure out what caused an outage and implement fixes, Swami Sivasubramanian, vice president of agentic AI at AWS, told CNBC. It’s what site reliability engineers, or SREs, do at many companies that provide online services.
SREs try to prevent downtime and jump into action during live incidents. Startups such as Resolve and Traversal have started marketing AI assistants for these experts. Microsoft’s Azure cloud group introduced an SRE Agent in May.
Rather than waiting for on-call staff members to figure out what happened, the AWS DevOps Agent automatically assigns work to agents that look into different hypotheses, Sivasubramanian said.
“By the time the on-call ops team member dials in, they have an incident report with preliminary investigation of what could be the likely outcome, and then suggest what could be the remediation as well,” Sivasubramanian told CNBC ahead of AWS’ Reinvent conference in Las Vegas this week.
Commonwealth Bank of Australia has tested the AWS DevOps Agent. In under 15 minutes, the software found the root cause of an issue that would have taken a veteran engineer hours, AWS said in a statement.
The tool relies on Amazon’s in-house AI models and those from other providers, a spokesperson said.
AWS has been selling software in addition to raw infrastructure for many years. Amazon was early to start renting out server space and storage to developers since the mid-2000s, and technology companies such as Google, Microsoft and Oracle have followed.
Since the launch of ChatGPT in 2022, these cloud infrastructure providers have been trying to demonstrate how generative AI models, which are often training in large cloud computing data centers, can speed up work for software developers.
Over the summer, Amazon announced Kiro, a so-called vibe coding tool that produces and modifies source code based on user text prompts. In November, Google debuted similar software for individual software developers called Antigravity, and Microsoft sells subscriptions to GitHub Copilot.
WATCH: Amazon rolls out AI-powered tools to help big AWS customers update old software
Technology
Amazon to let cloud clients customize AI models midway through training for $100,000 a year
Attendees pass an Amazon Web Services logo during AWS re:Invent 2024, a conference hosted by Amazon Web Services, at The Venetian hotel in Las Vegas on Dec. 3, 2024.
Noah Berger | Getty Images
Amazon has found a way to let cloud clients extensively customize generative AI models. The catch is that the system costs $100,000 per year.
The Nova Forge offering from Amazon Web Services gives organizations access to Amazon’s AI models in various stages of training so they can incorporate their own data earlier in the process.
Already, companies can fine-tune large language models after they’ve been trained. The results with Nova Forge will lean more heavily on the data that customers supply. Nova Forge customers will also have the option to refine open-weight models, but training data and computing infrastructure are not included.
Organizations that assemble their own models might end up spending hundreds of millions or billions of dollars, which means using Nova Forge is more affordable, Amazon said.
AWS released its own models under the Nova brand in 2024, but they aren’t the first choice for most software developers. A July survey from Menlo Ventures said that by the middle of this year, Amazon-backed Anthropic controlled 32% of the market for enterprise LLMs, followed by OpenAI with 25%, Google with 20% and Meta with 9% — Amazon Nova had a less than 5% share, a Menlo spokesperson said.
The Nova models are available through AWS’ Bedrock service for running models on Amazon cloud infrastructure, as are Anthropic’s Claude 4.5 models.
“We are a frontier lab that has focused on customers,” Rohit Prasad, Amazon head scientist for artificial general intelligence, told CNBC in an interview. “Our customers wanted it. We have invented on their behalf to make this happen.”
Nova Forge is also in use by internal Amazon customers, including teams that work on the company’s stores and the Alexa AI assistant, Prasad said.
Reddit needed an AI model for moderating content that would be sophisticated about the many subjects people discuss on the social network. Engineers found that a Nova model enhanced with Reddit data through Forge performed better than commercially available large-scale models, Prasad said. Booking.com, Nimbus Therapeutics, the Nomura Research Institute and Sony are also building models with Forge, Amazon said.
Organizations can request that Amazon engineers help them build their Forge models, but that assistance is not included in the new service’s $100,000 annual fee.
AWS is also introducing new models for developers at its Reinvent conference in Las Vegas this week.
Nova 2 Pro is a reasoning model whose tests show it performs at least as well as Anthropic’s Claude Sonnet 4.5, OpenAI’s GPT-5 and GPT-5.1, and Google’s Gemini 3.0 Pro Preview, Amazon said. Reasoning involves running a series of computations that might take extra time in response to requests to produce better answers. Nova 2 Pro will be available in early access to AWS customers with Forge subscriptions, Prasad said. That means Forge customers and Amazon engineers will be able to try Nova 2 Pro at the same time.
Nova 2 Omni is another reasoning model that can process incoming images, speech, text and videos, and it generates images and text. It’s the first reasoning model with that range of capability, Amazon said. Amazon hopes that, by delivering a multifaceted model, it can lower the cost and complexity of incorporating AI models into applications.
Tens of thousands of organizations are using Nova models each week, Prasad said. AWS has said it has millions of customers. Nova is the second-most popular family of models in Bedrock, Prasad said. The top group of models are from Anthropic.
WATCH: Amazon set to kick off AI conference next week: Maxim’s Tom Forte on what to expect
-
Sports2 years agoStory injured on diving stop, exits Red Sox game
-
Sports3 years ago‘Storybook stuff’: Inside the night Bryce Harper sent the Phillies to the World Series
-
Sports2 years agoGame 1 of WS least-watched in recorded history
-
Sports3 years agoButton battles heat exhaustion in NASCAR debut
-
Sports3 years agoMLB Rank 2023: Ranking baseball’s top 100 players
-
Sports4 years ago
Team Europe easily wins 4th straight Laver Cup
-
Environment3 years agoJapan and South Korea have a lot at stake in a free and open South China Sea
-
Environment1 year agoHere are the best electric bikes you can buy at every price level in October 2024