Salesforce Inc (NYSE: CRM) says its latest AI platform dubbed Agentforce “closed over 200 deals in the first week of it being available.”
Agentforce has already signed a number of notable customers, including SharkNinja, Adecco, Heathrow Airport, and its pipeline “is in the thousands for potential transactions” in the coming quarters.
Salesforce has become a “supplier of digital labour … the digital labour opportunity is incredible,” the company’s chief executive Marc Benioff said in an interview last night.
CRM is up 13% in premarket after reporting better-than-expected revenue for its fiscal Q3.
CRM positioned to benefit from the AI frenzy
Artificial intelligence was first thought of as a headwind for Salesforce.
The concern was: names like CRM that rely on selling cloud-based software on a per-person basis will likely lose some demand as AI replaces a part of the corporate workforce.
But the early response to Agentforce that Salesforce first unveiled at its Dreamforce conference in September suggests artificial intelligence will likely prove to be a boon, not a bane for CRM over the long term.
Nonetheless, the suite of AI agents is in its early innings only. It will take some time before Agentforce starts to contribute meaningfully to the company’s financial metrics.
Salesforce stock has rallied a whopping 70% over the past six months.
Salesforce’s AI deals exceeds 2,000
Agentforce and other AI-enabled solutions evidently have potential to help Salesforce push its revenue growth back into the double-digit percentages.
The New York listed firm more than tripled the number of contracts that included AI tools and were worth over $1 million in its third fiscal quarter.
Salesforce now has a total of more than 2,000 AI deals in place.
The company is seeing solid momentum in multi-cloud deals as well that are typically coupled with “higher spend and lower attrition,” as per its press release on Tuesday.
Still, there’s reason to think twice before choosing to invest in CRM shares at current levels.
Salesforce: wait for a better entry point
Salesforce improved its net income by 25% in the recently concluded quarter but its per-share earnings at $2.41 still failed to meet analysts’ forecast.
More importantly, the cloud company expects that weakness to persist in Q4.
It guided for up to $2.62 a share of earnings for the current quarter – well below $2.65 per share that experts had called for.
It is also worth mentioning that CRM will have to invest rather aggressively to realise the growth opportunities related to Agentforce and its Data Cloud.
To that end, the company already plans on hiring 1,400 account executives in its fiscal Q4.
So, it’s likely that Salesforce stock will push further to the upside over the long-term, but a smarter move may be to wait for a pullback before building a position as it’s quite expensive at current levels.
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