Shares of Salesforce (CRM) plunged 5.01% in Monday's pre-market trading session following a downgrade from DA Davidson. The cloud-based software company faced scrutiny over its strategic focus on artificial intelligence (AI) initiatives.

DA Davidson analysts Gil Luria and Clark Wright downgraded Salesforce to Underperform from Neutral, slashing their price target to $200 from $275. The analysts expressed concerns that Salesforce is neglecting its core business in pursuit of a "premature AI opportunity." While acknowledging that the company's focus on Agentforce, its autonomous AI application, makes strategic sense given AI's transformative potential, the analysts warned that "betting the whole company on this effort may be at the expense of the other 98% of the company's business."

The downgrade highlights growing investor unease about Salesforce's AI-centric strategy. DA Davidson predicts that "the catalyst for underperformance will be further deceleration in the organic growth of the non Data/AI clouds." This shift in sentiment comes as Salesforce faces increasing competition in the enterprise software market and pressure to demonstrate the value of its AI investments. As the market opens, investors will be closely watching Salesforce's performance and any potential responses from the company regarding its strategic direction.