Salesforce stock experiences a 17% decline, heading towards its worst day since 2008.

• On Wednesday, Salesforce released weaker-than-expected fiscal first-quarter results, causing its shares to fall in premarket trading on Thursday.
• During Salesforce's first quarter, broader macroeconomic challenges reemerged with intensity.
• Although the company missed its target, many analysts are optimistic about its potential to benefit from generative artificial intelligence.

On Thursday, the stock experienced a decline of more than 17% in premarket trading, which could lead to its worst day since 2008.

Salesforce reported lower-than-expected revenue for the first time in 15 years during its fiscal first-quarter results on Wednesday, along with lighter-than-anticipated guidance.

According to LSEG, the cloud software vendor reported a 11% increase in revenue for the period, which amounted to $9.13 billion, falling short of the $9.17 billion forecasted by analysts.

Salesforce anticipates second-quarter adjusted earnings per share of $2.34 to $2.36 on $9.2 billion to $9.25 billion in revenue. Meanwhile, analysts surveyed by LSEG predicted $2.40 in adjusted earnings per share on $9.37 billion in revenue.

During Salesforce's first quarter, broader macroeconomic challenges intensified, affecting not only the company but also other software companies. Additionally, execution issues and changes to Salesforce's go-to-market strategy negatively impacted the company's performance.

The price target on the stock was reduced by the analysts from $323 to $260.

The Citi analysts wrote in a note Thursday that they are comfortable remaining on the sidelines while waiting for improved growth or more evidence of Data Cloud/GenAI momentum/monetization, as growth is slowing and there are no de-risked estimates.

Other firms took a more optimistic position.

Salesforce was reaffirmed as a "high-quality software franchise" by Goldman Sachs analysts, who also stated that the company must regain investor confidence. Despite this, they predicted that easing interest rates, the conclusion of the election, and the emergence of generative artificial intelligence would drive growth.

Salesforce is a "Gen-AI winner" that is "under-appreciated" by analysts at Goldman Sachs, who predict "meaningful margin expansion" in the future.

Despite the challenges in Salesforce's growth, Morgan Stanley analysts predict that the company will see benefits from generative AI in the upcoming year.

The analysts maintained their overweight rating on the stock.

Although the quarter was a letdown and may decrease investor confidence in a short-term growth rebound, the evidence indicates that the effects are more cyclical than permanent.

— CNBC's Michael Bloom and Jordan Novet contributed to this report