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Marc Benioff, co-founder and CEO of Salesforce, attends the 50th World Economic Forum in Davos, Switzerland, on Jan. 21, 2020.

Denis Balibouse | Reuters

There was a moment, during the pandemic-fueled growth days of 2020, when Salesforce surpassed Oracle by market cap. Marc Benioff had finally toppled his protege, Larry Ellison.

That moment is long gone.

Salesforce’s stock price has dropped 25% this year, the worst performance in large-cap tech and the second-steepest decline in the Dow, beating only UnitedHealth. Meanwhile, Oracle has jumped 34%, outperforming most of its peers and well outpacing the major indexes.

The two companies that were once about even by valuation are now separated by about $400 billion. Oracle is worth $630 billion, and Salesforce has dropped to $239 billion. Ellison now ranks second behind Elon Musk on the Bloomberg Billionaires Index, with a $278 billion net worth. Benioff sits in 318th place at $10.4 billion.

Investors are eager to hear how Benioff plans to right the ship when Salesforce reports quarterly results after the close on Wednesday.

Sales growth has been mired in the single digits for four straight quarters as the company reckons with the challenges of saturation in its key market of customer relationship management software. That streak is expected to continue, with analysts estimating revenue growth of 8.7% to $10.1 billion, according to LSEG.

During the April period, about a quarter of Salesforce’s $9.3 billion in subscription and support revenue came from products related to customer service, its biggest category. The company charges for its Service Cloud offering based on the number of agents who use the software.

With the rapid rise of artificial intelligence, some analysts predict more inquiries will be handled through automation, posing a risk to Salesforce.

Benioff is well aware of the challenge. He said in June that AI is already handling about 30% to 50% of the company’s work. It’s a big reason why Salesforce reportedly slashed 1,000 jobs earlier this year.

When it comes to customers, Salesforce now sells Agentforce, an AI system for answering customer support requests. After becoming available in October, Agentforce was delivering $100 million in annualized revenue, Benioff told analysts on a conference call in May.

AI is turning the software industry into a 'dangerous place to be in': Portfolio Manager

“It’s not significant enough to move the needle on this business, given the scale,” said Michael Turrin, a Wells Fargo analyst who has a hold recommendation on Salesforce shares.

The hope is that customers end up paying more for Agentforce than for Service Cloud, Turrin said.

The big difference for Oracle is that it’s one of the early beneficiaries of the AI boom. Known primarily for its database software that sits inside big companies and government agencies, Oracle has notched cloud infrastructure commitments from OpenAI and Musk’s xAI.

Agentforce could be Salesforce’s window into AI business, if it gains traction.

“I think there’s been a lot of frustration with Salesforce’s share performance, so I think we’re at a point where investors are trying to figure out if there’s an opportunity for a bit of a rebound here,” Turrin said.

Looking for double-digit growth

Demmert: We think this might be the quarter

In late 2022, activist investors started going after Salesforce, dissatisfied with Benioff’s high-cost acquisitions, the company’s underperforming stock and its expanding workforce. The activists began agitating for a more favorable mix of sales and profit, and Salesforce responded by expanding margins sooner than it had planned.

One of the main instigators, Starboard Value, is back for more. In the second quarter, the firm, which first bought Salesforce stock in 2022, boosted its holding by 47%, according to a filing. In October 2024, Starboard’s Jeff Smith complimented Salesforce’s profitability improvements but said he still believed “there’s a lot more to go.”

Vulcan Value Partners is a Salesforce shareholder that’s comfortable with the software company’s plans. After picking up a stake in 2020, Vulcan added 345,000 shares in the second quarter, increasing its total holdings to $300 million.

“The thing that we focus on is the value per share of the business,” said Stephen Simmons, a portfolio manager at the firm. “That is continuing to grow. There’s nothing we’re seeing that’s saying this company is going away anytime soon.”

Analysts expect earnings per share to increase to $2.78 for the latest quarter, up from $2.56 a year earlier, according to LSEG.

Vulcan sold its Oracle shares in 2020, missing out on a steep rally that followed. Simmons said he’d buy again if the stock becomes discounted.

“Funny how things go around and come around,” Simmons said. “Benioff starts Salesforce as a cloud-native enterprise company, and Larry’s over at Oracle trying to transition his on-prem customers to the cloud.”

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Salesforce CEO confirms 4,000 layoffs ‘because I need less heads’ with AI

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Salesforce CEO confirms 4,000 layoffs ‘because I need less heads' with AI

Salesforce CEO Marc Benioff participates in an interview at the World Economic Forum in Davos, Switzerland, on Jan. 22, 2025.

Chris Ratcliffe | Bloomberg | Getty Images

Salesforce has cut 4,000 of its customer support roles, CEO Marc Benioff recently said while discussing how artificial intelligence has helped reduce the company headcount.

Benioff revealed the layoffs during an interview published Friday on The Logan Bartlett Show podcast.

“I’ve reduced it from 9,000 heads to about 5,000, because I need less heads,” Benioff said while discussing the impact of AI on Salesforce operations.

Salesforce has been on the front lines of the AI revolution and has built what it calls an “Agentforce” of customer service bots.

“Because of the benefits and efficiencies of Agentforce, we’ve seen the number of support cases we handle decline and we no longer need to actively backfill support engineer roles,” Salesforce said in a statement Tuesday to NBC Bay Area.

The layoffs come after Benioff over the summer announced AI is doing up to 50% of the work at Salesforce, which is based in San Francisco.

Laurie Ruettimann, a human resources consultant, said AI is affecting jobs in several industries.

“There have been layoffs all over America directly attributed to AI,” Ruettimann said, adding anyone who wants to stay employed or looking for work needs to learn new skills.

“If your network could get you a job, it would have done it already. It would have done it yesterday,” Ruettimann said. “It’s on you to expand your vision, to expand your horizons and to meet new people.”

Analyst Ed Zitron said AI is being blamed by tech companies that over hired during the pandemic. The companies are now looking to lure investors by claiming to be more efficient, Zitron said.

“It’s just a growth at all costs mindset,” Zitron said. “The only thing that’s important is growth, even if it ruins people’s lives. Even if it makes the company worse and provides an inferior product.”

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Apple shares rise after judge rules Google can continue preload deals in antitrust case

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Apple shares rise after judge rules Google can continue preload deals in antitrust case

Tim Cook, CEO of Apple Inc., during the Apple Worldwide Developers Conference at Apple Park campus in Cupertino, California, on June 9, 2025.

David Paul Morris | Bloomberg | Getty Images

Apple shares rose more than 3% in extended trading Tuesday after a federal judge ruled that Alphabet may continue making payments to preload Google Search onto the iPhone.

Although Apple wasn’t a party in the search monopoly trial, the judge was considering remedies that would bar Google from paying billions per year to Apple to be the default search engine on the Safari browser on iPhones, Macs and iPads.

“Google will not be barred from making payments or offering other consideration to distribution partners for preloading or placement of Google Search, Chrome, or its GenAI products,” Judge Amit Mehta wrote in his decision.

“Cutting off payments from Google almost certainly will impose substantial — in some cases, crippling — downstream harms to distribution partners, related markets, and consumers, which counsels against a broad payment ban,” the decision continued.

The landmark case focused on Google’s dominance of the general search market, Google’s violations of the Sherman Act and the barriers to entry that the search engine erected.

However, the judge said that Google will be barred from entering or maintaining “any exclusive contract” related to preloading its search engine or key apps on devices, specifying that Google can’t bundle its Android services with Google search or condition revenue share agreements on the acceptance of other Google apps or services.

The decision said that Apple’s deal with Google to be the default search engine was “exclusive” because it established Google as the default out-of-the-box search engine.

But while Mehta put restrictions on Google making payments to ensure its products receive exclusive distribution, he fell short of banning those payments entirely, leaving open the possibility that the two companies could strike a new deal. The remedies would limit any revenue-sharing agreement to one year, according to the Department of Justice.

Apple did not immediately respond for a request for comment.

“Now the Court has imposed limits on how we distribute Google services, and will require us to share Search data with rivals,” Google said in a blog post. “We have concerns about how these requirements will impact our users and their privacy, and we’re reviewing the decision closely.”

The U.S. Department of Justice filed its suit against Google in 2020, alleging that Google kept its share of the general search market by erecting strong barriers for challengers, such as its default search deals. The U.S. District Court in Washington ruled last August that Google violated Section 2 of the Sherman Act. Eddy Cue, Apple’s senior vice president of software and services, testified on Google’s behalf about potential remedies.

Tuesday’s filing was the first time the judge had detailed his proposed remedies.

Analysts previously said that it may take years before Apple is forced to make changes in response to a Google suit ruling. Google has said it will appeal the ruling, and analysts say any remedies trial could last for up to two years. Google can also appeal the outcome of the remedies trial, and the Supreme Court can choose take a look at it once appeals are exhausted.

Google CEO Sundar Pichai (L) and Apple CEO Tim Cook (R) listen as U.S. President Joe Biden speaks during a roundtable with American and Indian business leaders in the East Room of the White House on June 23, 2023 in Washington, DC.

Anna Moneymaker | Getty Images

Default agreements

While Google contracts with companies such as Samsung and browser-maker Mozilla to be the default search engine on their platforms, the most important and biggest such “default agreement” deal is with Apple. Google paid all partners $26 billion in total to be the default search engine in 2021, according to documents discussed in court.

Google paid because it funnels traffic from Apple’s 1 billion iPhone users to its search engine, and the revenue is critical for the growth of Apple’s services business, which investors love because it is so much more profitable than hardware sales.

In addition to the licensing payments, Apple says that it uses Google because it’s the best search engine and that its priority is to offer the best tools to its customers.

Apple also has options if it cannot make Google the default search engine. Earlier this year, for example, Apple’s Cue said in court as a witness for Google that the iPhone maker is also considering adding AI search engines as options to its software.

“Cue’s testimony establishes that Google’s high revenue share payments deterred Apple from trying to capture for itself all the advertising rents that flow through the Safari browser’s default search box,” the judge wrote in Tuesday’s filing.

Apple’s revenue from Google is reported in its financials as advertising revenue, which is reported as part of the company’s Services business, which also includes AppleCare warranties, cloud services like iCloud, and digital content like apps and Apple Music.

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Waymo starts testing in Denver, Seattle in bid to expand robotaxi service across U.S.

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Waymo starts testing in Denver, Seattle in bid to expand robotaxi service across U.S.

Waymo partners with Uber to bring robotaxi service to Atlanta and Austin.

Uber Technologies Inc.

Alphabet’s Waymo unit will begin test drives of its robotaxis in Denver and Seattle this week, with humans behind the wheel, the company said Tuesday.

“We will begin driving manually before validating our technology and operations for fully autonomous services in the future,” a company spokesperson said in an email. Waymo announced the tests in blog posts.

The autonomous vehicle venture aims to expand its driverless, ride-hailing service across the U.S. after already launching commercial operations in Austin, Texas, as well as Atlanta, San Francisco, Phoenix and Los Angeles.

In some markets, including Austin and Atlanta, Waymo’s driverless rides can only be hailed through the Uber app. In others, riders must use the company’s stand-alone Waymo One app to book a robotaxi.

Safety drivers, who are employees of Waymo, will man the steering and braking behind the test vehicles in Denver and Seattle. The company is also running similar tests with its robotaxis in New York, having recently obtained permits in the biggest U.S. market.

The company’s test fleet in Denver and in Seattle will include a mix of their fully electric Jaguar iPace and Geely Zeekr AVs.

Waymo told CNBC that it will have up to a dozen cars each in Denver and Seattle to start testing.

Waymo’s primary competition on the global stage is Baidu-owned Apollo Go in China, which operates driverless ride-hailing services across Asia. Meanwhile, Tesla has obtained a permit to operate a ride-hailing business in Texas, and is testing a manned robotaxi service in Austin and another in San Francisco.

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