Salesforce Stock Slumps Despite AI Partnership with Workday
Salesforce Inc CRM shares are trading down by 2.1% to $250.69 on Wednesday, despite the announcement of a strategic partnership with Workday Inc WDAY aimed at developing an AI-powered employee service agent. The partnership aims to create a personalized, data-driven experience for employees, automating tasks, providing support, and generating insights to enhance productivity and efficiency.
However, the broader market volatility is impacting Salesforce shares. The SPDR S&P 500 ETF Trust SPY and Invesco QQQ Trust, Series 1 QQQ are experiencing their worst weekly performance in three months due to a widespread selloff in chipmakers, which has impacted tech stocks such as Salesforce.
In addition, rising unemployment claims and stagnant retail sales data are contributing to mixed economic sentiment. While these factors could fuel hopes of Federal Reserve rate cuts, they also point towards potential economic slowdown, which could negatively affect business investments in enterprise software solutions like those offered by Salesforce.
Key Insights for Investors on the Workday Partnership
The new AI agent will leverage the combined strengths of Salesforce’s Agentforce platform and Einstein AI with Workday’s platform and AI capabilities. This unified approach allows for a seamless employee experience, leveraging data from both companies to facilitate natural conversations and assist with tasks like onboarding and career development.
The partnership will integrate Salesforce CRM data with Workday’s financial and HR data, creating a unified data foundation. This integration will also extend to Slack, enabling users to interact with Workday records through conversational interfaces. The AI agent is designed to handle straightforward requests, while escalating complex issues to human agents with full context, encouraging seamless human-AI collaboration.
This partnership offers several key benefits for both employees and employers:
- Enhanced employee support: The AI agent will provide employees with natural language conversations, enabling efficient self-service HR, personalized learning paths, and streamlined workflows.
- Improved workforce planning and business insights: For employers, the integration offers enhanced workforce planning, continuous financial planning, and intelligent sales enablement based on rich data insights.
Salesforce CEO Marc Benioff highlighted the potential of this partnership to augment employee capabilities and deliver exceptional customer experiences. Workday CEO Carl Eschenbach emphasized the transformative potential of integrated AI-powered employee experiences. The strategic partnership aims to establish new standards for employee engagement and business performance by harnessing the combined strengths of both companies’ platforms.
Is CRM a Good Stock to Buy?
Determining whether a stock is a good buy requires considering several factors beyond just valuation and price action. While you can find valuable information on Benzinga’s quote pages, such as the one for Salesforce, it is essential to assess factors like dividend payments and share buyback programs, known as capital allocation programs.
Salesforce currently pays a dividend, yielding 0.6% per year based on the closing price on July 24, 2024. For investors seeking specific dividend yields, you can explore Benzinga’s dividend calendar.
For example, if an investor wants to earn an annualized return of 13.51%, they would need to buy a share of ARMOUR Residential REIT by August 14, 2024. This would entitle them to a $0.24 dividend payout on August 29, 2024.
Share buyback programs are highly variable and occur at the discretion of the company. Typically, these programs are seen as a support for share prices, acting as a backstop for demand. News on Salesforce will often disclose whether the company has recently implemented a buyback program.
Ultimately, determining whether Salesforce is a good stock to buy is a decision that requires individual assessment based on your investment goals, risk tolerance, and understanding of the market conditions and company fundamentals.
