Salesforce's Agentforce: A Pivotal Moment for AI Agents and Stock Performance

Will Agentic AI Be Able to Power Salesforce's Stock Higher in 2025? | The Motley Fool

On Wednesday, Salesforce (CRM 1.00%) turned in solid results for its fiscal 2025 fourth quarter and issued conservative guidance as it looks toward agentic artificial intelligence (AI) to be its next big growth driver. With agentic AI, software bots (the "agents") can autonomously go out and complete tasks on your behalf with little human intervention. That developing technology is viewed as being the next big evolutionary stage of the AI revolution. However, Salesforce stock has gotten off to a tough start to the year. It's down about 10% in 2025 as of this writing, and nearly flat over the past 12 months. So what do the software-as-as-service (SaaS) company's most recent results suggest about the possibility that the stock can rebound? Salesforce is plowing forward with agentic AI through its Agentforce offering, which it introduced back in October. The AI agent solution has seen quick uptake among customers, with the company saying it had closed 5,000 Agentforce deals, including 3,000 paid deals, as of the end of the fiscal quarter on Jan. 31. That was up from the 1,000 deals the company boasted about in a mid-December update. Through Agentforce, Salesforce provides its customers with a variety of out-of-the-box AI agents that can handle specific tasks in such areas as customer service, human resources, and technical support. Customers can also use low-code and no-code tools within the platform to create and customize their own AI agents. The company has said if you can describe a task, Agentforce can build an agent to handle it. Salesforce created Agentforce to help augment the human labor force and increase workers' productivity and efficiency. It's a consumption-based product that costs $2 per interaction. The company is also leaning into its partnership network. Management says half of its Agentforce sales and 70% of Agentforce activations have come from its partner ecosystem. It noted that it has 127,000 system-integrated employees trained on Agentforce and more than 1,000 technology partners building and selling agents. It noted that customers can now use Agentforce with Alphabet's Gemini, and its multimodal models and be deployed on Google Cloud. It also noted that Amazon has helped it close a number of large deals. As for the fiscal quarter itself, Salesforce's revenue increased by 8% year over year to $10 billion, which was right at the midpoint of its guidance range of $9.9 billion to $10.1 billion. Subscription and support revenue also rose by 8% to $9.45 billion. Mulesoft revenue jumped 7%, while Slack revenue climbed by 11%. That was an acceleration in growth for both compared to fiscal Q3. Tableau revenue, meanwhile, edged up by 3%. Adjusted earnings per share (EPS) climbed 21% to $2.78. The company also generated $3.8 billion in free cash flow during the quarter. Salesforce's current remaining performance obligations (cRPOs) increased by 10% year over year to $30.2 billion. This is a common metric used by SaaS companies to describe their revenue outlooks. Salesforce forecast that in fiscal 2026, its revenue would grow by 7% to 8%, to a range of $40.5 billion to $40.9 billion, with adjusted EPS of between $11.09 to $11.17. Management also expects subscription and support revenue to grow by about 8.5%. For the fiscal first quarter, it projected that its revenue would grow by between 6% to 7% year over year. Data source: Salesforce. Salesforce trades at a forward price-to-sales multiple of under 7 based on analysts' estimates for its fiscal 2026, while its forward price-to-earnings (P/E) ratio is under 27, and its price/earnings-to-growth (PEG) ratio is 0.5. A positive PEG ratio below 1 is typically considered to reflect an undervalued stock. That's an attractive valuation if the Agentforce platform can help accelerate the company's revenue growth. As a consumption platform meant to drive cost savings and improve productivity for its users, the opportunity for the product is enormous. Meanwhile, Salesforce's guidance looks conservative; the company has a good chance of beating and raising it throughout the year. That sets the stock up well for the rest of the year. I would jump on this leading AI SaaS name, given its valuation and the opportunity it has in front of it.

Salesforce Stock Revival Hinges on Success of AI Agents

(Bloomberg) -- Results from Salesforce Inc. this week pose a key test for the stock and for what many believe is the next big thing in artificial intelligence: AI agents. The software giant is seen at the vanguard of this kind of tool, which is designed to handle multi-step processes on behalf of users without human supervision. It launched its Agentforce product in October and introduced a well-received update in December, meaning this report, due after the market close on Wednesday, will be key to the case for its adoption and potential. A positive read could not only revive the stock, which has trended lower this year, but reassure investors about AI's potential to drive growth and efficiency more broadly. "AI agents are now at the forefront of the software trade, and this is the first quarter where we should see hard numbers," said Clayton Allison, portfolio manager at Prime Capital Financial. "People are questioning whether the capex spent on AI has been worth it, so if we see tangible results and monetization from Salesforce, that could suggest tech deserves its premiums. If it's a bad print, that will be disappointing since so much growth has already been baked in." Salesforce's previous report came in better than expected on key metrics, thanks in large part to AI, sparking a rally that took shares to a record. However, it failed to build on that rally, and is down 16% since that December release. Last week was the worst for the stock since August, and shares closed at their lowest since November on Monday. The stock is down almost 8% this year, underperforming both the broader market and an index of software companies this year. Despite that slump, the company is seen as well positioned to deploy AI agents into its software for such functions as customer service, scheduling, and lead scoring. It has been aggressive with the strategy, hiring workers to sell the product even as it cuts jobs elsewhere. AI agent tools are proliferating; OpenAI released a research-focused one earlier this month. However, Wall Street is positive on Saleforce's ability to capitalize. Morgan Stanley sees it "in the right place for the shift towards Agentic Computing," while Scotiabank wrote that checks "highlighted a clear uptick in customers expanding their spend with Salesforce" as a result of Agentforce, although it caveatted that near-term growth "is still an open question" as many customers remain in the testing stage. According to data compiled by Bloomberg, 75% of software companies have beaten earnings expectations this reporting season, while about 69% have for revenue. For the overall tech sector, the beat rates stand at 84% and 71%, respectively. That, coupled with the newness of Agentforce and the stock's recent underperformance, could mean that expectations are low going into this report, while recent management changes may temper how aggressive the company will be with its outlook. As shares look like a relative bargain among megacap AI stocks, an upside surprise could be a catalyst. The stock trades at 27 times estimated earnings, almost half their 10-year average. It trades at a discount to both the S&P 500 tech sector index and the software index. The stock is 30% below the average price target, making for one of the highest implied returns in tech among the next 12 months. "The multiple looks pretty reasonable given Salesforce's stable and predictable growth, especially since you can bank on an inflection in the next couple of quarters from Agentforce," said Eric Clark, portfolio manager at Accuvest Global Advisors, who expects the stock to top $500 over the next couple years, compared with its Monday close just above $308. He stressed that while near-term results may not show much uplift from Agentforce, the long-term potential is strong, especially if low-cost AI models like China's DeepSeek accelerate adoption of AI services and functions more broadly. "Salesforce has always been sticky with its customers, and I think Agentforce is going to be like superglue," he said. "It is going to build massive momentum, and even if it takes more time than the market hopes, I don't think anyone doubts this will be a meaningful part of its business over time." Tech Chart of the Day Microsoft Corp closed at its lowest since September on Monday, the latest sign of how the software titan has struggled in recent months. The stock fell 1% on Monday, after TD Cowen wrote the company has canceled some leases for US data center capacity, raising concerns over whether it's securing more AI computing capacity than it needs in the long term. Shares are down almost 14% from a peak hit in July.

Salesforce Stock Revival Hinges on Success of AI Agents

Results from Salesforce Inc. this week pose a key test for the stock and for what many believe is the next big thing in artificial intelligence: AI agents. The software giant is seen at the vanguard of this kind of tool, which is designed to handle multi-step processes on behalf of users without human supervision. It launched its Agentforce product in October and introduced a well-received update in December, meaning this report, due after the market close on Wednesday, will be key to the case for its adoption and potential.