Shares of Salesforce (CRM -0.71%) were down about 2.5% at the start of trading on Monday before rallying by midmorning. Piper Sandler downgraded the stock to a neutral rating, citing the potential for slowing growth.

The stock has rebounded this year following a sharp sell-off in 2022. However, the stock is still 33% off its all-time high. 

Macro headwinds could hold Salesforce in check

Salesforce has been a high-growth leader in the customer relationship management (CRM) market. The company regularly posted annual revenue growth of 20%-plus for many years before the weak macro environment caused top-line growth to slow around 11%. This initially sent the stock spiraling downward last year, which is why the downgrade from Piper Sandler might have spooked investors today.

Piper Sandler analysts cited internal research that found customer demand slowing for leading cloud companies. Because of this finding, the analysts believe this year's growth estimates for Salesforce are too high. The consensus Wall Street estimate has Salesforce revenue growing 11% year over year. 

Investors have been optimistic about Salesforce's focus on growing free cash flow and the potential for a turnaround in enterprise spending. This has pushed the stock up 51% year to date, but Salesforce is not out of the woods yet. During the most recent earnings call in August, management noted that macro headwinds are still leading to longer sales cycles, which is pressuring revenue growth. 

Is artificial intelligence (AI) demand an opportunity for Salesforce?

Piper Sandler sees risks from the focus on generative AI in the near term. As companies shift their focus to investing in this breakthrough new technology, it may shift some spending away from Salesforce.

Salesforce should benefit from AI over the long term. It has already been investing heavily in this technology, which led to the launch earlier this year of Einstein GPT, which brings chatbot capabilities to Salesforce's CRM platform. Investors should watch how Salesforce characterizes demand for these services in the next quarterly earnings report.