Salesforce's AI Push: Will It Turn the Stock Around?

Salesforce (CRM) is at a critical juncture as it doubles down on its AI initiatives. The company's Agentforce platform, designed to provide AI assistants for various business functions, has shown promise in early deployments. For example, 1-800Accountant plans to significantly reduce seasonal staffing by leveraging Agentforce for administrative tasks and client support. This highlights both the potential benefits for Salesforce's clients and the potential challenges for Salesforce's traditional revenue model.

However, concerns remain about whether Agentforce can drive enough new revenue to offset potential losses from reduced seat-based licenses. D.A. Davidson analyst Gil Luria expressed concern that Salesforce's core business may continue to slow, even if the AI business grows. The key will be how quickly Agentforce's usage-based consumption revenue model can expand.

Despite these concerns, Salesforce CEO Marc Benioff maintains that Agentforce enhances the company's core products. Several customers, including SharkNinja and reMarkable, have reported increased efficiency and streamlined operations through the use of Agentforce.

Looking ahead, Salesforce needs to demonstrate clear evidence that its AI investments are translating into broad-based revenue growth. The upcoming Dreamforce conference will be a crucial opportunity for the company to showcase customer adoption and the overall impact of Agentforce on its business. Investors will also be paying close attention to any potential activist pressure from stakeholders like Starboard Value, which has increased its stake in Salesforce. The stock is down more than 27% year-to-date, presenting a potential buying opportunity for those who believe in Salesforce's long-term vision.

Agentforce is Salesforce's AI platform that provides AI assistants to help businesses with various tasks.

Agentforce has a usage-based consumption revenue model, which could offset losses from reduced seat-based licenses.

Concerns include whether the growth of AI business can offset slowing growth in Salesforce's core business.

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