In a software market gripped by uncertainty, Salesforce has delivered a powerful counter-narrative: a multi-billion dollar contract with the U.S. Department of Defense. This substantial deal emerges at a time when investor anxiety over the impact of new AI agents on traditional software subscription models is running high. The question for shareholders is whether this single piece of news can catalyze a broader recovery in sentiment for the recently battered stock.
Sector-Wide “AI Anxiety” Weighs on Software Shares
Recent volatility across the software sector provides crucial context. A widespread sell-off gained momentum in late January, fueled by concerns that emerging AI agent technologies—highlighted by the launch of tools like Anthropic’s “Claude Cowork”—could disrupt established SaaS business frameworks. Salesforce shares were caught in this downdraft alongside numerous peers, making the contrast between sector-wide skepticism and its own significant government win all the more striking.
The $5.6 Billion Counterargument
The most significant development is a major contract award. On January 26, Salesforce announced it had secured a multi-year cloud and artificial intelligence agreement with the U.S. Army, valued at approximately $5.6 billion. This deal arrives as investors are acutely sensitive to any challenges to the profitability of conventional software subscriptions.
The implicit message is one of endurance. Large institutions and government bodies, especially for critical infrastructure, continue to rely on proven, stable platforms rather than fleeting technological trends. This reality may help ground the current debate, particularly for clients who prioritize reliability over experimentation.
Should investors sell immediately? Or is it worth buying Salesforce?
Key Details at a Glance:
* Contract: Multi-year cloud and AI agreement with the U.S. Army (~$5.6 billion)
* Next Catalyst: Q4 and Fiscal Year 2026 results, scheduled for release after market close on Wednesday, February 25, 2026
* AI Focus: Market participants will scrutinize tangible progress metrics for the “Agentforce” initiative
Upcoming Earnings as the True Test
The upcoming quarterly report will be the definitive proving ground. When Salesforce reports on February 25, the market’s focus will extend beyond revenue and profit figures to demand concrete evidence of traction in its “Agentforce” AI strategy. For reference, the company’s previous Q3 results showed $10.26 billion in revenue (a year-over-year increase of 9.1%) and earnings per share of $3.25, both surpassing analyst expectations.
Despite the recent contract news, the share price environment remains challenging. The stock concluded yesterday’s session at $199.44, a level that places it roughly 40% below its 52-week high. This disparity underscores the extent of the recent erosion in investor confidence.
The February earnings release will determine whether the Army contract provides only a temporary support—or if Salesforce can pair it with robust “Agentforce” signals to build a sustainable recovery narrative that endures beyond the announcement.
Ad
Salesforce Stock: Buy or Sell?! New Salesforce Analysis from February 5 delivers the answer:
The latest Salesforce figures speak for themselves: Urgent action needed for Salesforce investors. Is it worth buying or should you sell? Find out what to do now in the current free analysis from February 5.
Salesforce: Buy or sell? Read more here...
