Salesforce's AI Push Gains Steam: Will Agentforce Drive CRM's Growth?

Salesforce, Inc. CRM is accelerating its artificial intelligence (AI) strategy, with Agentforce emerging as a key growth driver. The company is shifting from traditional software tools to AI-powered agents that can automate tasks, improve workflows and deliver measurable outcomes.

Salesforce’s Agentforce platform is gaining solid momentum. The platform’s annual recurring revenues (ARR) grew 169% year over year to $800 million in the fourth quarter of fiscal 2026. Agentforce has also crossed 29,000 deals, showing rapid enterprise adoption. This makes it one of Salesforce’s fastest-growing products and a central part of its long-term strategy.

The company’s Agentforce suite is a key part of its broader AI expansion strategy. Combined with the Data 360 platform, these AI-driven offerings brought in $2.9 billion in recurring revenues in the fourth quarter of fiscal 2026, representing a 200% year-over-year increase. This indicates that customers are not only testing AI tools but also increasingly deploying them at scale across sales, service and marketing functions.

Booking trends are encouraging as well. Salesforce ended the fourth quarter of fiscal 2026 with the current remaining performance obligation of $35.1 billion, rising 16% year over year, primarily driven by larger deals and early renewals. Management highlighted that more than 60% of Agentforce deals came from existing clients, showing Salesforce’s success in cross-selling AI features to its user base.

Overall, Agentforce is providing Salesforce with a clearer path to reaccelerate growth. The durability of this shift will depend on sustained adoption and consistent execution across its various cloud segments. Management forecasts that fiscal 2027 revenues will increase in the 10-11% range, while the Zacks Consensus Estimate indicates 10.9% year-over-year growth.

How Rivals Fare Against Salesforce

Microsoft Corporation MSFT and ServiceNow, Inc. NOW are also pushing AI automation in the enterprise market.

Microsoft has integrated strong AI features into its Dynamics 365 platform through its Copilot tools, simplifying tasks such as writing emails, creating reports and summarizing meetings for users. Since many companies already use Microsoft products, integrating Copilot into their existing workflows is simple and cost-effective.

ServiceNow’s Now Assist platform uses AI to automate IT service management, customer support and human resource management tasks. ServiceNow has been rolling out industry-specific AI tools, similar to what Salesforce is doing with Agentforce.

Salesforce’s Price Performance, Valuation and Estimates

Shares of Salesforce have plunged 31.3% over the past year compared with the Zacks Internet – Software industry’s decline of 14.1%.

Salesforce One-Year Price Return Performance

Image Source: Zacks Investment Research

From a valuation standpoint, CRM trades at a forward price-to-earnings ratio of 13.98, significantly below the industry’s average of 24.34.

Salesforce Forward 12-Month P/E Ratio

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for Salesforce’s fiscal 2027 and 2028 earnings implies a year-over-year increase of approximately 4.6% and 11.9%, respectively. Estimates for fiscal 2027 and 2028 have been revised upward in the past 30 days.

Image Source: Zacks Investment Research

Salesforce currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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