May 30 (Reuters) - Salesforce shares sank 16% before the bell on Thursday after its lowest quarterly revenue growth forecast on record raised fears that high interest rates and AI offerings from rivals were hampering demand at the cloud-based software firm.

The San Francisco-based company was on track to lose more than $40 billion in market value, if losses hold, after it reported quarterly revenue that was below expectations for the first time since 2006.

"Weak bookings in Q1 further test investor patience as the GenAI (generative AI) innovation cycle has yet to inflect top-line results and now increasingly becomes a point of competitive concern," Morgan Stanley analysts said in a client note.

Some brokerages warned that the forecast also meant software demand had slowed further in April as the U.S. economy showed some signs of cooling.

"It seems like the selling environment got worse from the end of March and more pronounced in April, which could explain why the off-cycle names, like Workday or Salesforce, suffered more than ServiceNow or Microsoft," Barclays analysts said.

Still, Salesforce's reiterated fiscal 2025 revenue forecast offered some optimism to Wall Street.

"With a strong focus to build pipeline, there is still some hope for the FY (fiscal year)," Barclays analysts said.

At least ten brokerages lowered their price targets on the stock following the results. D.A. Davidson's PT of $230 was the lowest among 49 analysts covering the stock.

So far this year, Salesforce and ServiceNow have risen more than 3%, Microsoft has gained 14%, while Workday has shed 23%. (Reporting by Kanchana Chakravarty in Bengaluru; Editing by Devika Syamnath)