Infosys, Persistent Systems shares down after Salesforce's weak revenue guidance

Shares of Indian IT majors Infosys and Persistent Systems edged lower during the trading session on Friday, May 31, in the aftermath of cloud software vendor Salesforce recording its worst performance in the US stock market in the last 20 years.

The effect was seen on Infosys in the early trading hours on the Indian bourses, as the company's shares touched an intraday low of ₹1,400.5 apiece on the NSE. This was down 1.9% as against the last closing price.

Similarly, Persistent Systems fell to an intraday low of ₹3,438.5, down 2.2% as against the previous day's close.

The shares, however, partially recovered as the trading progressed. At 12:10 pm, Infosys' shares were valued 0.25% lower at ₹1,423.95, whereas Persistent Systems was down 1.9% at ₹3,449.25.

Why Infosys and Persistent Systems shares were down

Salesforce on Thursday said it sees revenue in the range of $9.2 billion to $9.25 billion. This is lower as compared to the estimate of $9.37 billion shared by the analysts tracked by LSEG.

The company's expected adjusted earnings per share for the second quarter of 2024 is in the range of $2.34 to $2.36, which is also lower as compared to the estimate of $2.40 shared by the analysts surveyed by LSEG.

In the January-March quarter of this year, Salesforce posted a revenue of $9.13 billion, which was up 11% year-on-year but fell short of the estimate of $9.17 billion.

After the earnings report and the revenue guidance were shared by Salesforce on Thursday, its stock fell by $53.61 or 19.74% to settle at $218.01 on Nasdaq.

The last time when Salesforce stock witnessed such a steep fall dates back to July 4, 2004, when the shares had plummeted by 27%.