Salesforce posted better-than-expected quarterly results this week, giving CEO Marc Benioff fresh ammunition to push back against a wave of investor skepticism regarding the company’s aggressive pivot toward artificial intelligence. The business software giant reported earnings that eclipsed analyst projections, offering a potential reprieve for a stock that has been hammered recently by doubts over whether the industry’s massive spending on AI will yield profitable returns.Despite the earnings beat, the modest market reaction highlights the persistent doubts hanging over the technology sector. Investors have grown increasingly wary of the hundreds of billions of dollars being poured into AI infrastructure without immediate signs of a commensurate financial payoff. Salesforce too has been feeling the pressure of AI jitters acutely. Before earnings report, the company’s market value had plunged 35% from a peak of $369 per share a year ago, wiping out approximately $125 billion in shareholder wealth. Even Nvidia, the dominant chipmaker powering the AI boom, has not been immune to the volatility. Despite soaring past earnings estimates two weeks ago, Nvidia’s stock remains 15% below its late October peak.For the quarter ending in October, the San Francisco-based company earned $2.1 billion, or $2.19 per share, marking a 37% increase from the same period last year. Revenue rose 9% to nearly $10.9 billion. Salesforce also issued a forecast for the current quarter that exceeded Wall Street predictions. “We’re uniquely positioned for this new era,” Benioff said during a 25-minute address on an analyst conference call.Benioff, who co-founded Salesforce in 1999 and helped pioneer the shift to cloud computing, characterized the company’s new technology as generating “wow” moments for customers. Shares of Salesforce initially surged more than 5% following the report but pared gains to 2% after Benioff’s presentation.
Salesforce big bet on AI agents
Salesforce has focused its strategy on “Agentforce,” a suite of AI agents designed to automate customer sales and support tasks. In a move highlighting the potential for this technology to replace human labor, the company recently laid off 4,000 of its own customer support workers as its AI tools took over those responsibilities.However, corporate adoption has been slower than anticipated. Jay Woods, chief market strategist for Freedom Capital Markets, told news agency AP that as customers haven’t embraced AI agents as quickly as investors hoped, Salesforce has become a “poster child” for the doubts hanging over the technology.“We all know that the speed of innovation has exceeded the speed of customer adoption,” Benioff acknowledged Wednesday, though he predicted this dynamic would change as more organizations integrate AI into their operations.Benioff also highlighted the company’s long-term growth targets, projecting $60 billion in revenue for the fiscal year ending in January 2030. To reach that goal, the company needs to maintain average annual increases of 10% from its current fiscal year forecast of $41.5 billion.The company also recently completed an $8 billion acquisition of Informatica, a software maker building AI tools for corporate data management. “We’re continuing to execute on the path to our $60 billion dream,” Benioff said.
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