After a period of investor skepticism regarding its position in the artificial intelligence race, Salesforce has delivered a powerful counter-argument with its latest earnings report. The catalyst for this shift in sentiment is the remarkable performance of its new AI platform, propelling the company’s shares to their best weekly performance since 2023.
Profitability and Upward Guidance Impress
The financial results presented a nuanced picture. While quarterly revenue of $10.26 billion slightly missed market expectations, the company’s profitability metrics significantly exceeded forecasts. Adjusted earnings per share came in at $3.25, a substantial beat over the $2.86 consensus estimate.
This strong margin performance led management to raise its full-year profit outlook. The company now anticipates adjusted earnings per share for the fiscal year to be in the range of $11.75 to $11.77. Furthermore, the revenue guidance for the upcoming fourth quarter surpassed analyst estimates, reinforcing confidence in near-term business momentum.
The AI Engine: Agentforce’s Explosive Growth
Central to the renewed optimism is the breakout success of Salesforce’s AI division, specifically its “Agentforce” platform. This service, which provides autonomous AI agents for business operations, has seen its annual recurring revenue (ARR) skyrocket. ARR surged by 330% year-over-year to surpass $500 million.
CEO Marc Benioff highlighted the strategic impact, noting that demand for Agentforce was the primary driver for six of the company’s ten largest deals last quarter. The number of paid contracts for the platform grew by 50% sequentially. This performance signals to the market that Salesforce is not merely discussing AI but is effectively generating substantial revenue from it.
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Analyst Sentiment and Market Context
Wall Street’s response has been favorable. Equity researchers at Morgan Stanley and Bank of America reaffirmed their buy ratings, suggesting the market may still be undervaluing the firm’s AI potential. This view is supported by data from the recent “Cyber Week,” where AI agents reportedly influenced 20% of global purchases, driving $67 billion in sales.
Despite the positive AI narrative, challenges persist within the broader business. Growth in established segments like Marketing and Commerce has decelerated to just 1%, indicating uneven dynamics across the product portfolio. Additionally, the company faces the complex task of integrating its $8 billion acquisition of Informatica.
The Road Ahead for the Share Price
While the stock’s recent advance of approximately 12.8% for the week to €223.85 is notable, it must be viewed in a broader context. Since the start of the year, the share price remains down by over 30%. A considerable gap of about 35% also exists to its 52-week high of €345.
The current AI-driven enthusiasm has provided a crucial boost, but for a sustained reversal in fortune, Salesforce must demonstrate that this boom can permanently offset softer performance in its more mature core business areas. The coming quarters will be critical in assessing whether this AI inflection point marks the beginning of a durable recovery.
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