Salesforce witnessed its worst day on Monday since early 2016, when the stock dropped nearly 13 percent. Salesforce shares plunged 8.7 percent to $121.01 on Monday, sending a drop in shares of companies that sell subscription software. ServiceNow fell 8.4 percent, Workday dropped 7.6 percent, and Atlassian fell 8.7 percent.
Further, a number of cloud stocks plunged over 10 percent including Coupa, Five9, Shopify, Twilio, Okta, Everbridge, HubSpot, Tableau, and Zendesk. This sector has been hot this year propelled by IPOs, large acquisitions, and a significant shift in spending from desktop software to cloud, according to CNBC news.
CNBC reported that the Monday’s slide had no obvious catalyst, as the earnings season is behind and businesses are decreasing prior to the Thanksgiving holiday. However, decline in the broader market is having a huge impact on technology companies. Facebook shares continue to fall with unfavorable news regarding abuse its platform while shares of Apple plunged when Wall Street Journal reported that the tech giant has reduced production orders for new iPhones.
Concerns around world economic growth are affecting the tech companies, CNBC reported, citing Joe Terranova, Virtus Investment Partners’ Chief Market Strategist. Terranova said that the market is not seeing what they saw at the beginning of this year. Whereas a notable enterprise spend on software was seen which is dissipating, he added.
On Monday, both S&P 500 and the Dow Jones Industrial Average plummeted over 1.5%, while the NASDAQ stock market lost 3%, and is currently 13 percent below its high-reached in August. CNBC reported that even after the cloud slide that started in late September this year, Salesforce is still rose 18 percent for this year. Twilio, on the other hand, climbed 200 percent.
Zev Fima, a research analyst said that Salesforce still sees a bright future for its stock. The company’s extensive suite of products allow its clients to get a 360-degree view of its customers, according to Fima, it is crucial aspect and a must-have to survive in the business world. As the world is becoming more digitized, Salesforce will be teaching other companies how to utilize the data they collected in a way to earn more revenue, Fima added.