What's going on?

Salesforce reported unexpectedly strong results earlier this week, but investors fretted about some bumps in the road.

What does this mean?

Digitization is a hot topic right now, and Salesforce hasn�t just got a finger in the pie: it�s got all ten of them in there. The firm�s wide range of products, from its flagship sales cloud software to the workplace messenger Slack, has drawn customers aplenty, even as the economy�s gone (ahem) slack. That success continued last quarter, with both revenue and profit growth beating analyst expectations � but there are signs the downturn�s begun to rock even Salesforce. Businesses are taking a leaf from the Jungle Book right now, spending on nothing but the bare necessities, which could be why the firm says it�s facing �intense customer scrutiny�. That’s reflected in the numbers: the company’s 14% revenue growth last quarter versus the same time the year before was the first time the metric�s ever come in under 20%. That, plus a worse-than-expected revenue outlook, could explain why investors sent Salesforce�s stock down 7%.

Why should I care?

Zooming in: Taylor�s high-tailin�.
The sudden departure of Salesforce�s co-CEO probably didn�t reassure investors either: they ran day-to-day operations at Salesforce, and their speedy exit has raised questions about why they�re really leaving and who�s going to step into their shoes. And on an even more basic level, the co-CEO was considered quite the asset: helping invent Facebook�s like button and creating Google Maps are pretty impressive achievements, after all.

For markets: Think twice.
It�s been a dire year for the stocks of cloud software companies like Salesforce, with an index that tracks some of the biggest names in the industry dropping over 40%. But don�t rush out to grab a bargain just yet: see, a key valuation metric of the index is still well above its long-term average, and analysts reckon cloud players� shares could drop even further as the sector�s growth slows.