Salesforce Faces Triple Threat: Lawsuit, AI Disruption, and a Stock in Freefall

Salesforce battles a discrimination lawsuit, a rival AI startup, and a 28% stock drop, even as its Agentforce platform hits $800M in annualized revenue.

The CRM giant is navigating a perfect storm. A former employee has filed a discrimination lawsuit, a well-funded startup is targeting its core business model, and the stock has shed roughly 28 percent of its value since the start of the year. While Salesforce continues to push its AI platform Agentforce—now generating $800 million in annualized revenue—the market remains unconvinced.

Legal Challenge Over FMLA Violation

On April 28, a former employee filed a lawsuit against Salesforce, alleging violations of the Family and Medical Leave Act. The plaintiff, identified in the case John v. Salesforce Inc., claims he took leave to care for a parent battling cancer. During his absence, the company allegedly restructured his responsibilities with a major client, creating what the lawsuit describes as a negative performance record. Upon his return, Salesforce informed him his position was eliminated due to a "lack of work." The former employee disputes this, arguing the termination was retaliation for exercising his legal right to family leave.

Startup Threatens CRM Model

Meanwhile, a New York-based startup is taking direct aim at Salesforce's turf. Actively AI has closed a $45 million Series B funding round, valuing the company at $250 million. The firm deploys autonomous AI agents that handle sales research and customer prioritization without human intervention. Industry observers view this as a frontal assault on Salesforce's traditional CRM model. While Salesforce integrates AI into its existing architecture, startups like Actively AI are building "agent-first" platforms from the ground up—a structural advantage that could reshape the competitive landscape.

Sector Contagion Hits Hard

The stock's worst single-day drop came on April 23, when it plunged 9 percent to $172.55—not because of any Salesforce-specific news, but due to a chain reaction triggered by ServiceNow's quarterly report. ServiceNow's management warned of margin pressure from an acquisition, sending shockwaves through the enterprise software sector. Since then, the stock has struggled to recover. It currently trades at around $154.70, well below both its 50-day and 200-day moving averages. The 200-day average sits at roughly $197, meaning the stock is trading more than 21 percent below that key technical level.

Agentforce Gains Traction, Stock Doesn't

Operationally, Salesforce continues to deliver. In fiscal year 2026, the company posted revenue of $41.5 billion, up 10 percent year-over-year, with free cash flow reaching $14.4 billion. Agentforce, its flagship AI platform, now serves over 18,000 customers and has processed more than 2.4 billion "Agentic Work Units"—a new metric Salesforce uses to measure AI agent activity. The platform has closed 29,000 deals, with annualized revenue growing 169 percent to $800 million.

For fiscal 2027, management projects revenue between $45.8 billion and $46.2 billion, representing growth of roughly 10 to 11 percent. The board has also raised the quarterly dividend to $0.44 per share and authorized a $50 billion share buyback program. Yet none of this has stopped the stock's slide.

AI Anxiety Overwhelms Fundamentals

The market's real concern is existential. Investors fear that Microsoft Copilot, OpenAI agents, and Anthropic's recently unveiled Claude Cowork plugins could erode Salesforce's CRM dominance. The worry is that AI agents will replace traditional SaaS platforms rather than complement them. That fear intensified after Anthropic's announcement, which signaled a shift toward autonomous AI tools that bypass established software ecosystems.

Wedbush analyst Dan Ives pushes back on this narrative. After speaking with IT decision-makers, he argues that AI projects are moving from experimentation to production deployment, with high switching costs and deep data integration serving as structural moats for incumbents like Salesforce.

Google Cloud Partnership Adds Firepower

On April 22, Salesforce and Google Cloud announced an expanded partnership. AI agents will now be able to execute end-to-end workflows across both platforms, with Agentforce natively supporting Google's Gemini models. More than 1,400 customers are already using the integration. However, the deal carries a strategic risk: the deeper hyperscalers like Google embed themselves into customer workflows, the more Salesforce's long-term negotiating leverage could erode.

Of the 35 analysts covering Salesforce, the majority rate it a buy, with an average price target of $278.74. That implies roughly 80 percent upside from current levels. The relative strength index sits at 20, a level that technically signals deeply oversold conditions. Whether that marks a bottom will likely depend on the next quarterly results, expected in late May.