Twelve Charts This Week - 5/31/2024

1

SALESFORCE DISAPPOINTED THE MARKET with its first quarter results released on Wednesday. Earnings were better than expected and revenues a bit light, but guidance was reduced for the current quarter. One important metric of performance is ‘current remaining performance obligations’ (CRPO), a combination of deferred revenue and order backlog. CRPOs were expected to grow 12% in the first quarter but they grew by only 10%. This shortfall was enough to send the stock down 20% yesterday, a painful reminder of what happens when a stretched valuation meets a revenue slowdown. This should give pause to investors since Salesforce has been one of the players in the current bull market in tech and AI, and its stock (blue in the chart) has moved mostly in sync with the Nasdaq 100 (green) since the market low of 2020. The other customer relationship management companies (SAP, Oracle, Hubspot, monday.com, Sage) and software giants (Microsoft, Google, Meta) were also down on Tuesday in proportion t…