Salesforce's AI Growth Engine: A Mixed Bag for Investors

Salesforce's shares have fallen nearly 30% year-to-date, despite beating Q1 earnings and raising full-year guidance. CEO Marc Benioff sold 2,250 shares for $540,000, sparking investor scrutiny. The company's AI-powered offerings, such as Service Cloud and Agentforce, are expected to drive growth, but some analysts have questioned the acquisition strategy and growth momentum. The stock's next earnings report on Sept. 3 will be closely watched for signs of whether its AI strategy can reverse its fortunes.

Salesforce Inc. (CRM) has seen its shares fall nearly 30% year-to-date, despite beating Q1 earnings and raising full-year guidance. The company's AI-powered offerings, such as Service Cloud and Agentforce, are expected to drive growth, but some analysts have questioned the acquisition strategy and growth momentum. The stock's next earnings report on September 3 will be closely watched for signs of whether its AI strategy can reverse its fortunes.

The latest research from Salesforce reveals that CFOs are redefining return on investment (ROI) as AI agents play a more strategic role in their organization [1]. This shift is evident in the rapid transformation of CFOs' approach to AI, moving from cautious spenders to strategic investors. In 2020, 70% of CFOs had a conservative AI strategy, but this number has plummeted to just 4% today [1]. The introduction of digital labor, or AI agents, has fundamentally reshaped how CFOs evaluate ROI, moving beyond traditional metrics to encompass a broader range of business outcomes [1].

Salesforce's ADAM framework, which includes Agents, Data, Apps, and Metadata, is at the core of its AI strategy. The company's Agentforce platform delivers AI agents, while the Data Cloud platform unifies data. MuleSoft connects all systems, and Salesforce's pending $8 billion acquisition of Informatica will enhance data quality and readiness [2]. Examples of ADAM's effectiveness include Finnair deploying agents for customer service automation and PepsiCo combining multiple Salesforce clouds with an agent layer [2].

However, despite the promising AI strategy, Salesforce's stock performance has been lackluster. CEO Marc Benioff sold 2,250 shares for $540,000, sparking investor scrutiny. The company's forward price-to-earnings ratio is significantly below the industry average, and the Zacks Consensus Estimate for fiscal 2026 and 2027 earnings implies a year-over-year increase of approximately 10.8% and 11.5%, respectively [2].

The upcoming earnings report on September 3 will be crucial for Salesforce. Investors will closely watch to see if the company's AI strategy can drive growth and reverse its stock decline. The company's ability to keep its lead in AI automation will depend on how quickly customers adopt the ADAM framework.

References:
[1] https://www.salesforce.com/news/stories/cfos-invest-ai-for-growth/
[2] https://www.nasdaq.com/articles/crm-bets-adam-framework-will-it-fortify-leadership-agentic-ai