Salesforce Stock Has Been an AI Loser. Why New Targets Could Bring Back Optimism.

Salesforce said annual recurring revenue from agentic AI came to $440 million in its fiscal second quarter. (Photograph by David Paul Morris/Bloomberg)

Key Points

• Salesforce forecasts over $60 billion in revenue by fiscal year 2030, exceeding analyst expectations of $59.66 billion.
• Salesforce stock has declined 29% this year, with investors concerned about AI competitors displacing its CRM software.
• Agentforce, Salesforce’s AI agent, generated $440 million in annual recurring revenue in the fiscal second quarter from over 12,000 customers.

Salesforce has lost out in the artificial-intelligence investing trend this year. Now the business-software company is looking to get back into the game with an eye-catching revenue forecast suggesting its AI products will gain significant traction in the next few years.

Salesforce stock has fallen 29% this year so far through to Wednesday’s close as investors fret that its customer-relationship management software company could be displaced by AI competitors. Its Agentforce technology—an in-house version of an AI agent, which can handle routine sales, marketing, and service tasks—doesn’t appear to be making a significant impact.

However, a new long-term revenue forecast suggests the company is optimistic that will change. Salesforce said Wednesday that it expects to generate more than $60 billion in revenue in fiscal-year 2030, ahead of the $59.66 billion analysts were forecasting, according to FactSet.

Salesforce shares were up 7.2% at $253.51 in early trading on Thursday.

However, D.A. Davidson analyst Gil Luria said the new 2030 target appears “aspirational” as it implies the company will accelerate its organic revenue growth back to more than 10% annually. Luria has a Neutral rating and $225 target price on the stock.

“While we recognize that Salesforce’s pace of platform innovation has been accelerating over the last year, there seems to still be a disconnect between customer experiences and management’s commentary,” Luria wrote in a research note. “We also heard from customers that Agentforce implementations have had limited success at scale, partially due to customer related technology bottlenecks and issues implementing AI to achieve desired business outcomes.”

Salesforce said annual recurring revenue from agentic AI came to $440 million in its fiscal second quarter and more than 12,000 customers had adopted Agentforce.

“We’re leading the next great transformation in business—the era of the Agentic Enterprise—where AI elevates human potential and accelerates growth,” said Marc Benioff, CEO of Salesforce, in a statement. “Agentforce is at the center of this shift.”

Williim Blair analyst Arjun Bhatia kept an Outperform rating on the stock with no price target in a research note Thursday, arguing it is still early to judge Saleforce’s AI success.

“Despite the slower growth in the near term, the long-term risk/reward is still favorable as the company continues to expand margins and make progress on AI deployments,” Bhatia wrote.

Write to Adam Clark at adam.clark@barrons.com