According to CNBC, Salesforce shares popped 5% on Friday following a third-quarter earnings report that beat profit estimates. The company posted adjusted earnings per share of $3.25, well above the $2.86 Wall Street expected. Revenue came in at $10.26 billion, a solid 8.6% year-over-year increase, though it just missed the $10.27 billion analyst projection. The stock is now up 13% over the past five days, on track for its best week since 2023. CEO Marc Benioff is pushing back against investor fears that AI will make software companies obsolete, arguing the opposite is true. The company also highlighted the massive growth of its AI platform, Agentforce, whose annual recurring revenue skyrocketed 330% to $540 million.
The AI Narrative Versus Reality
Here’s the thing: the market’s reaction is all about the story Salesforce is telling. The revenue miss was basically a rounding error, but the profit beat and the explosive Agentforce growth gave investors a new narrative to buy into. For months, cloud software firms have been in the doghouse. Everyone’s been asking if generative AI, which can seemingly automate everything, will just make traditional SaaS platforms like Salesforce’s CRM obsolete. Benioff’s response? “Investors somehow think software companies are under arrest from AI, when the opposite is true.” He’s betting that AI, specifically tools that automate workflows (agents), will be a feature inside his platforms, not a replacement for them. It’s a compelling pitch, and the 330% Agentforce growth number is the perfect proof point. But is it enough to reverse a stock that’s still down 21% this year while the Nasdaq soared?
Acquisitions and Agentforce Momentum
Salesforce isn’t just talking about AI; it’s buying it. During the quarter, it scooped up two startups: Regrello for workflow automation and Waii, which uses natural language to generate code. These are classic Salesforce moves—absorbing innovative tech to bolster its own ecosystem. The real star, though, is Agentforce. Analysts from Cantor Fitzgerald noted that while there was initial skepticism, strong adoption in customer service is encouraging. They think Salesforce is finally formalizing its AI strategy, making it easier for customers to understand and buy. Benioff’s hype is maximalist: “Why everyone is so excited about Agentforce is because this is what AI was meant to be.” That’s a big claim. But for enterprises looking to integrate AI into actual business processes, a platform from a known vendor like Salesforce might seem a safer bet than a shiny, standalone AI tool. It’s the “AI for the enterprise” play, and it’s starting to get traction.
The Long Road Ahead
So, is this the start of a real turnaround? Analysts seem to think the groundwork is being laid for 2026. Mizuho pointed to continued leverage from digital transformation and expects solid growth, alongside “fiscal discipline” to improve margins. That’s key. Salesforce spent years in hyper-growth-acquisition mode. Now the story is about profitable growth, efficiency, and layering AI on top of its massive existing customer base. It’s a more mature, but potentially more stable, phase. But let’s not get carried away. A single week’s pop doesn’t erase a year of underperformance. The company has to prove that Agentforce isn’t just a flashy demo but a product that drives significant, sustained revenue growth and keeps customers locked into the Salesforce universe. If it can do that, then this week’s optimism might be justified. If not? Well, it’ll be back to the drawing board. For now, Wall Street is giving Benioff the benefit of the doubt, and that’s a win in itself.
