How Investors May Respond To Salesforce (CRM) Soft Revenue Outlook and Accelerated AI Restructuring

• In recent days, Salesforce reported fiscal second quarter results that topped analyst estimates, but issued a revenue forecast for the upcoming quarter that came in below market expectations, raising concerns about demand for its AI product offerings.
• Even as the company announced significant wins, such as a major deployment with Smarsh and expansion in government contracts, investors appear focused on the impact of softer guidance, restructuring measures, and workforce reductions tied to Salesforce’s shift toward AI-driven automation.
• We’ll examine how Salesforce’s softer revenue guidance and accelerated AI strategy are influencing the company’s long-term investment thesis.

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Salesforce Investment Narrative Recap

To be a shareholder in Salesforce today, you have to believe that the integration of AI-driven solutions like Agentforce will unlock new layers of customer value and operating efficiency across multiple industries. The recent slide in Salesforce’s stock following lower-than-expected short-term revenue guidance has heightened focus on demand for its AI products, but the company’s aggressive moves in buybacks and continued leadership in digital automation mean the longer-term growth thesis remains tied to broad-based adoption and recurring revenue expansion, while the primary risk is mounting competition from hyperscalers that could pressure revenue growth rates. As the near-term catalyst remains the pace of AI customer wins, the market reaction to softer guidance appears more focused on future competitive positioning than on any immediate financial disruption. Among recent announcements, the deployment of Salesforce's Agentforce AI platform at Smarsh stands out, the partnership aims to boost customer service efficiency and compliance for clients in highly regulated industries. This high-visibility customer endorsement of Salesforce’s agentic solutions is relevant to the current debate over adoption rates and product differentiation in a rapidly evolving market for enterprise AI tools. Yet, perhaps just as important for investors to be aware of, the intensifying competition from tech giants bundling CRM and AI services into broader enterprise offerings means...

Read the full narrative on Salesforce (it's free!)

Salesforce's outlook anticipates $50.8 billion in revenue and $10.2 billion in earnings by 2028. This projection is based on a 9.6% annual revenue growth rate and a $4.0 billion increase in earnings from the current $6.2 billion level.

Uncover how Salesforce's forecasts yield a $344.64 fair value, a 37% upside to its current price.

Exploring Other Perspectives

Forty members of the Simply Wall St Community estimate Salesforce's fair value from US$223.99 to US$344.64 per share. While some see upside beyond US$320, many remain focused on the risk that large technology rivals could challenge Salesforce’s recurring revenue growth, affecting future returns for shareholders.

Explore 40 other fair value estimates on Salesforce - why the stock might be worth as much as 37% more than the current price!

Build Your Own Salesforce Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Salesforce research is our analysis highlighting 4 key rewards that could impact your investment decision.
• Our free Salesforce research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Salesforce's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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