Salesforce will report earnings after the bell on Wednesday, with investors watching closely to see whether the software giant can shake off the AI-driven sell-off that has hammered the sector since February.
The Slack owner has lost around a third of its value this year, badly underperforming both the Nasdaq and wider software sector, as fears grow that AI could upend traditional seat-based software models.
The pressure intensified last month after rival Servicenow suffered a sharp post-earnings plunge, triggering concerns over whether AI tools could erode pricing power across enterprise software.
But Salesforce heads into results with one major advantage in the form of its aggressive push into “agentic AI” through its Agentforce platform.
The company said in February that Agentforce annual recurring revenue had surged 169 per cent year-on-year to $800m (£595m), while combined Agentforce and Data Cloud revenue hit $2.9bn. More than 29,000 Agentforce deals have now been signed since launch.
Wall Street expects Salesforce to post quarterly revenue of roughly $11.05bn, up around 12 per cent year-on-year, alongside adjusted earnings per share of $3.12.
Investors are likely to focus less on the headline numbers and more on whether AI growth is accelerating fast enough to offset slowing growth in Salesforce’s legacy CRM business.
Sector-wide shift
The earnings release also lands at a sensitive moment for the wider software sector, with analysts at Bank of America recently warning of a “structural reset”across enterprise software as AI changes how businesses buy and use digital tools.
However, elsewhere Deutsche Bank analysts said recent market fears may “underappreciate the opportunity for software companies to adapt to new paradigms”.
Despite the sell-off, Salesforce continues to generate huge cash flow. The firm returned $14.3bn to shareholders last year through buybacks and dividends, while authorising a fresh $50bn repurchase programme.
Options markets are braced for volatility after results, with traders pricing in a swing of roughly nine per cent in either direction by the end of the week.
