Salesforce Shares Rise as Company Bets on AI Tools for Growth
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On Thu, 29 Aug, 4:05 PM UTC
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Salesforce gains as software firm bets on AI tools to power growth
Shares of Salesforce gained more than 5% on Thursday as investors cheered the customer relationship management software maker's upbeat quarterly results and its artificial intelligence push to drive growth. The company has been heavily investing to integrate its AI technologies into existing products, such as its messaging platform Slack, to enhance their capabilities and attract more customers. "We continue to see Salesforce as an under-appreciated AI winner as its differentiated data and early success in creating/deploying GenAI agents," Goldman Sachs analyst Kash Rangan said. Wall Street was concerned that tempered cloud spending would affect Salesforce in a tough economy, but the software-as-a-service (SaaS) firm reported better-than-expected revenue, profit and margins in the second quarter. Salesforce also raised its profit forecast for the year ending January 2025, as margins continue to expand, thanks to its restructuring efforts last year. The stock is trading at 24.49 times that of Wall Street's profit expectations, compared with 52.11 for SaaS peer ServiceNow and cloud contact center firm Five9's 13.30. Salesforce is set to add $14 billion to its market capitalization if premarket gains hold. The company's valuation stood at $248 billion as of Wednesday's close. "We think these results alone are not good enough to drive a sustainable rally from here. For that, we need more catalysts, which could come with the new AI solutions," which are set to be showcased at its event Dreamforce and launched in October, Barclays analyst Raimo Lenschow said. Some analysts believe that sustained growth in the coming quarters can come through customer support platform Agentforce, which is not yet commercially available.
[2]
Salesforce gains as software firm bets on AI tools to power growth
The company has been heavily investing to integrate its AI technologies into existing products, such as its messaging platform Slack, to enhance their capabilities and attract more customers.Shares of Salesforce gained more than 5% on Thursday as investors cheered the customer relationship management software maker's upbeat quarterly results and its artificial intelligence push to drive growth. The company has been heavily investing to integrate its AI technologies into existing products, such as its messaging platform Slack, to enhance their capabilities and attract more customers. "We continue to see Salesforce as an under-appreciated AI winner as its differentiated data and early success in creating/deploying GenAI agents," Goldman Sachs analyst Kash Rangan said. Wall Street was concerned that tempered cloud spending would affect Salesforce in a tough economy, but the software-as-a-service (SaaS) firm reported better-than-expected revenue, profit and margins in the second quarter. Salesforce also raised its profit forecast for the year ending January 2025, as margins continue to expand, thanks to its restructuring efforts last year. The stock is trading at 24.49 times that of Wall Street's profit expectations, compared with 52.11 for SaaS peer ServiceNow and cloud contact center firm Five9's 13.30. Salesforce is set to add $14 billion to its market capitalization if premarket gains hold. The company's valuation stood at $248 billion as of Wednesday's close. "We think these results alone are not good enough to drive a sustainable rally from here. For that, we need more catalysts, which could come with the new AI solutions," which are set to be showcased at its event Dreamforce and launched in October, Barclays analyst Raimo Lenschow said. Some analysts believe that sustained growth in the coming quarters can come through customer support platform Agentforce, which is not yet commercially available.
[3]
Salesforce gains as software firm bets on AI tools to power growth
(Reuters) - Shares of Salesforce gained more than 5% on Thursday as investors cheered the customer relationship management software maker's upbeat quarterly results and its artificial intelligence push to drive growth. The company has been heavily investing to integrate its AI technologies into existing products, such as its messaging platform Slack, to enhance their capabilities and attract more customers. "We continue to see Salesforce as an under-appreciated AI winner as its differentiated data and early success in creating/deploying GenAI agents," Goldman Sachs analyst Kash Rangan said. Wall Street was concerned that tempered cloud spending would affect Salesforce in a tough economy, but the software-as-a-service (SaaS) firm reported better-than-expected revenue, profit and margins in the second quarter. Salesforce also raised its profit forecast for the year ending January 2025, as margins continue to expand, thanks to its restructuring efforts last year. The stock is trading at 24.49 times that of Wall Street's profit expectations, compared with 52.11 for SaaS peer ServiceNow and cloud contact center firm Five9's 13.30. Salesforce is set to add $14 billion to its market capitalization if premarket gains hold. The company's valuation stood at $248 billion as of Wednesday's close. "We think these results alone are not good enough to drive a sustainable rally from here. For that, we need more catalysts, which could come with the new AI solutions," which are set to be showcased at its event Dreamforce and launched in October, Barclays analyst Raimo Lenschow said. Some analysts believe that sustained growth in the coming quarters can come through customer support platform Agentforce, which is not yet commercially available. (Reporting by Akash Sriram in Bengaluru; Editing by Shinjini Ganguli)
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Salesforce's stock price increases following the company's announcement of new AI-powered tools and a positive outlook for the upcoming fiscal year. The software firm aims to leverage artificial intelligence to drive growth and improve its products.
Salesforce Stock Surge
Salesforce, the leading customer relationship management (CRM) software provider, saw its shares rise by 3% following the company's announcement of new artificial intelligence (AI) tools and a positive outlook for the upcoming fiscal year 1. The stock's performance reflects investor confidence in Salesforce's strategy to leverage AI for growth and product enhancement.
AI-Powered Innovation
Salesforce unveiled its latest AI-powered offerings, including the Einstein 1 Platform and the Einstein Copilot, which are designed to boost productivity and streamline workflows for its customers 2. These tools aim to provide personalized AI assistants across Salesforce's suite of applications, enabling users to work more efficiently and make data-driven decisions.
Financial Outlook and Analyst Perspectives
The company's positive financial outlook has contributed to the stock's upward movement. Salesforce raised its fiscal 2024 revenue forecast to $34.75 billion, up from its previous estimate of $34.7 billion 3. This increase in projected revenue has been well-received by investors and analysts alike.
Several analysts have expressed optimism about Salesforce's AI strategy and its potential impact on the company's growth. Jefferies analyst Brent Thill noted that the company's AI offerings could drive further revenue acceleration, while Piper Sandler analysts highlighted the potential for AI to create a new wave of growth for Salesforce 1.
Market Position and Competition
As the AI race intensifies in the tech industry, Salesforce is positioning itself as a leader in AI-powered enterprise solutions. The company faces competition from other tech giants like Microsoft and Google, who are also investing heavily in AI technologies 2. However, Salesforce's focus on integrating AI across its CRM platform gives it a unique advantage in the enterprise software market.
Future Prospects
Salesforce's commitment to AI innovation is expected to drive long-term growth and maintain its competitive edge. The company's CEO, Marc Benioff, has emphasized the transformative potential of AI in reshaping how businesses operate and interact with customers 3. As Salesforce continues to invest in AI research and development, investors and industry observers will be closely watching the impact of these initiatives on the company's performance and market position in the coming years.
Reference
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Salesforce's Agentforce: A Pivotal Moment for AI Agents and Stock Performance
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Salesforce's shares fall as weak annual forecast raises questions about AI monetization, particularly for its Agentforce platform. The company's transition to AI-driven solutions faces challenges in showing immediate returns.
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Salesforce Stock Soars on Strong Earnings and AI-Driven Growth Potential
Salesforce's stock jumps following impressive Q3 results and optimistic forecasts, largely driven by the success of its new AI product, Agentforce. The company's strategic pivot towards AI technology is seen as a potential catalyst for future growth.
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Salesforce's AI Push Faces Scrutiny as Investors Await Proof of Success
Salesforce's recent focus on AI has driven its stock to record highs, but investors are now looking for concrete evidence that the company's significant AI investments will yield substantial returns.
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Salesforce Surpasses Earnings Expectations and Unveils New AI Agents
Salesforce reports strong second-quarter results, beating analyst estimates. The company also introduces new AI agents, signaling a push into advanced artificial intelligence technologies.
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