Salesforce, Inc. shares fell 2.85% to $166.34 on Tuesday as investors reacted to disappointing preliminary earnings from International Business Machines Corp, which sparked concerns about weakness in the software and infrastructure sectors. The decline in Salesforce stock comes in sympathy with IBM, where revenue of $17.2 billion missed the consensus estimate of $17.86 billion, and adjusted EPS of $2.93 fell short of the $3.02 projection. IBM CEO Arvind Krishna described the results as "disappointing," noting that clients shifted capital expenditure toward servers and storage, causing several large software deals to slip from the second quarter.

IBM Results Drive Sector Sentiment

The shortfall in IBM's performance was primarily driven by its Z mainframe business and associated software stack. This dynamic raised fears that AI tools could disrupt traditional big software vendors, a sentiment that weighed heavily on Salesforce shares. Salesforce and IBM have maintained a close partnership for over 24 years, including joint AI initiatives integrating Salesforce's Einstein platform with IBM's watsonx AI capabilities. This historical relationship increases the sensitivity of Salesforce's stock to shifts in sentiment regarding IBM's business health.

Analyst Adjustments and Price Targets

Following the news, Evercore ISI Group analyst Kirk Materne maintained an Outperform rating on Salesforce but lowered the price target from $260 to $250. This adjustment follows a downgrade by Keybanc to Sector Weight last week. Despite the recent pressure, Salesforce retains a consensus Buy rating with an average price target of $243.21.

Technical Position and Moving Averages

Prior to the latest drop, Salesforce had attempted a rebound, rising 4.46% to $170.60 on Monday. The stock is now navigating a complex technical setup. It remains 6.5% above its 20-day Simple Moving Average (SMA) of $160.29 but stays below key longer-term averages. The stock is trading 1.2% below its 50-day SMA of $172.68 and 18.7% below its 200-day SMA of $209.93. The Relative Strength Index (RSI) is at 54.35, indicating neutral territory.

Support and Resistance Levels

Key resistance for Salesforce is identified at $187.50, aligning with a prior stall zone and the declining intermediate trend. On the downside, support sits at $146.50, near the 52-week low of $146.32. With the Technology sector under pressure and defensive market flows favoring sectors like Energy, sustained follow-through for tech names remains challenging.

Wall Street analysts adjusted their outlooks on several prominent companies on Thursday, leading to downgrades for Salesforce Inc, Tractor Supply Co, and others. These revisions reflect shifting perspectives on the stocks' potential performance, with price targets adjusted accordingly. The changes impact companies across entertainment, packaging, technology, banking, and retail sectors.

Salesforce and Tractor Supply Cut

KeyBanc analyst Jackson Ader downgraded Salesforce Inc from Overweight to Sector Weight. Salesforce shares closed at $166.58 on Wednesday. This move signals a more cautious stance on the software giant's near-term trajectory. Ader wrote that, aside from Salesforce's valuation, there is little evidence to support the stock as an attractive buying opportunity, saying it is "difficult to find evidence" of meaningful future upside. The analyst also said recent quarterly results have been disappointing. In addition, channel checks remain soft, while feedback from Agentforce customer events suggests the product still needs further development. As a result, Ader said expectations for faster revenue growth, current remaining performance obligations (cRPO) and bookings appear difficult to support.

Mizuho analyst David Bellinger downgraded Tractor Supply Co from Outperform to Neutral and reduced the price target from $50 to $32. Tractor Supply shares closed at $29.58 on Wednesday. The lower price target suggests concerns about the retailer's growth prospects.

Other Analyst Actions

Goldman Sachs analyst Stephen Laszczyk downgraded Madison Square Garden Entertainment Corp from Buy to Neutral but raised the price target from $72 to $82. Madison Square Garden shares closed at $74.77 on Wednesday. The higher target accompanies a more neutral rating.

Wells Fargo analyst Gabe Hajde downgraded Packaging Corp Of America from Overweight to Equal-Weight and increased the price target from $245 to $246. Packaging Corp shares closed at $224.46 on Wednesday.

Keefe, Bruyette & Woods analyst Christopher Mcgratty downgraded First Citizens BancShares Inc from Outperform to Market Perform and maintained the price target of $2,300. First Citizens BancShares shares closed at $2,044.62 on Wednesday.

Salesforce Expands Defense Business

The downgrade came one day after Salesforce announced a new federal contract. The company said the U.S. Air Force's 441st Vehicle Support Chain Operations Squadron has adopted Salesforce Missionforce National Security to manage its $13.5 billion fleet of more than 84,000 vehicles. Salesforce said the platform will modernize fleet management, streamline logistics and improve operational readiness, expanding the company's presence in the defense sector.

Technical Picture Remains Weak

Salesforce continues to trade below key long-term technical levels. The stock sits about 23% below its 200-day simple moving average and roughly 6% below its 50-day moving average. Although it is trading slightly above its 20-day moving average, that short-term strength has not changed the broader downtrend. The relative strength index stands at 46.3, indicating neutral momentum. The reading suggests the stock is neither overbought nor oversold. Traders are watching resistance near $187.50, while support is around $146.50, close to the stock's 52-week low.

Summary of Downgrades