Salesforce (CRM) stands at a pivotal juncture, navigating the transformative currents of artificial intelligence while addressing investor concerns about a decelerating U.S. economy and its impact on enterprise software demand. Despite recent stock performance fluctuations following its latest earnings report, the company’s strategic pivot towards AI-driven solutions, particularly its AgentForce platform, is demonstrating significant traction and revenue generation, underscoring CEO Marc Benioff’s vision for the future of the software industry.
The company’s investment in AI agent technology is yielding tangible results. According to Benioff, Salesforce’s AgentForce platform has rapidly scaled to over 12,000 customers within nine months of its inception. The combined revenue from Salesforce’s data cloud and AI agents has already reached approximately $1.2 billion, exhibiting a triple-digit growth rate within the organization. This robust adoption trajectory is further evidenced by more than 6,000 paid deals secured for the AI agent platform since its launch, signaling strong market acceptance for its innovative capabilities.
However, the market’s reception to Salesforce’s latest financial disclosures was mixed. Investor anxiety emerged regarding the pace of AI adoption by corporations amid a broader economic slowdown, alongside apprehensions about how AI might disrupt traditional software models. Salesforce projected a slowdown in third-quarter sales growth to a range of 8-9%, a decline from the 10% growth achieved in the second quarter. Conversely, the company slightly improved its full-year non-GAAP operating margin guidance to 34.1% from 34%. Furthermore, its closely monitored current remaining performance obligations (cRPO) increased by 11% to $29.4 billion, exceeding analyst estimates, which often serves as a forward-looking indicator of future revenue.
In the competitive landscape, Salesforce is not only growing its AI footprint but also directly challenging rivals. Benioff highlighted the company’s success in securing government contracts, indicating inroads against competitors like Palantir (PLTR), a prominent player in the government technology sector. Benioff also publicly questioned competitors’ pricing strategies, suggesting a significant disparity in how value is perceived and charged within the high-stakes government contracting space.
Amid these dynamics, Benioff remains steadfast in his conviction that AI will augment, rather than undermine, the software industry. He emphasizes a focus on restoring Salesforce to double-digit top-line growth, dismissing what he perceives as a misunderstanding among those outside the software sector regarding AI’s impact. Wall Street analysts largely maintain an optimistic outlook for Salesforce. Market data indicates that over 60% of sell-side analysts covering Salesforce recommend a “Buy” rating on the stock, despite a year-to-date decline of 24% in share value. Analysts like Brent Thill of Evercore ISI point to Salesforce’s attractive valuation, trading at a substantial discount compared to its peers based on estimated enterprise value to free cash flow. This perspective underscores a prevalent belief that investor concerns about AI’s disruptive potential for enterprise software may be exaggerated, though full valuation recovery could hinge on the company’s ability to meaningfully monetize its AI offerings.
David Thompson earned his MBA from the Wharton School and spent five years managing multi-million-dollar portfolios at a leading asset management firm. He now applies that hands-on investment expertise to his writing, offering practical strategies on portfolio diversification, risk management, and long-term wealth building.