Key Highlights
- Shares of Salesforce (CRM) advanced approximately 3.4% to reach $179.73 on Monday as concerns about artificial intelligence disrupting traditional software-as-a-service firms started to diminish.
- The company’s Agentforce platform and Data Cloud products have collectively achieved $2.9 billion in annual recurring revenue, with Agentforce specifically surging 169% compared to last year to reach $800 million.
- Fourth-quarter results showed revenue expanding at a low-teens percentage rate while adjusted earnings per share climbed 37% year-over-year.
- At approximately 12.7x forward earnings, CRM shares trade nearly 40% beneath the software sector’s average multiple, indicating substantial pessimism is baked into the valuation.
- Analyst consensus stands at Moderate Buy with a mean price objective of $260.48, representing approximately 45% potential appreciation from present levels.
Salesforce (CRM) finished Monday’s session with a 3.44% gain at $179.73 as market participants reassessed the magnitude of AI-related risks facing enterprise software providers. The shares have declined 29.1% since the beginning of the year and currently trade 37.6% underneath the 52-week peak of $288.06 reached in May 2025.
The rally emerged as investors started challenging the narrative that artificial intelligence represents an existential threat to established SaaS platforms. This fear — frequently described as the “SaaS Rout of 2026” — had pressured valuations across the sector for several months.
Positive developments from industry peers reinforced the changing sentiment. Figma disclosed 46% revenue expansion with preliminary AI revenue streams demonstrating genuine momentum. ServiceNow unveiled a long-term artificial intelligence collaboration with Experian. These announcements strengthened the argument that enterprise software providers are successfully integrating AI capabilities rather than facing obsolescence.
Salesforce had experienced another positive session three trading days prior, climbing 4.2% following the Trump-Xi summit in Beijing, which temporarily improved technology sector sentiment as the S&P 500 momentarily exceeded 7,500. While the summit yielded limited concrete agreements, it influenced trade-related market psychology.
Agentforce Demonstrates Substantial Growth
Salesforce is doing more than protecting its established CRM franchise. With Agentforce, the organization enables clients to construct and launch AI agents for functions including customer support, IT assistance, and billing operations.
The performance metrics are compelling. Agentforce combined with Data Cloud achieved $2.9 billion in annual recurring revenue, posting growth exceeding 200% year-over-year. Agentforce individually generated $800 million in ARR, representing 169% expansion.
The composition of this growth is particularly noteworthy. Over 60% of fresh bookings originated from current customers — demonstrating that Salesforce is deepening relationships within its existing base rather than depending exclusively on acquiring new accounts. This signals product adoption strength, not market share erosion.
The Informatica transaction supports this strategic direction as well. It enhances enterprise data organization and quality, enabling AI agents to function more effectively throughout customer environments.
Fourth-quarter performance validated this trajectory. Subscription and support revenue — comprising roughly 95% of total sales — expanded 13% year-over-year. Adjusted EPS surged 37%. These metrics don’t reflect a company experiencing fundamental disruption.
However, Current Remaining Performance Obligation increased just 9% in organic constant-currency terms after adjusting for currency fluctuations and the Informatica addition. The reported figures provide a somewhat optimistic view.
Current Pricing Reflects Considerable Skepticism
For fiscal year 2027, Salesforce projected revenue of $46 billion at the midpoint — representing 11% growth — with adjusted EPS around $13.15, approximately 5% expansion. Roughly 3 percentage points of revenue growth stems from Informatica.
At approximately 12.7x forward earnings, CRM shares trade at a 40% discount compared to the software industry average of roughly 25x. The valuation sits more than 60% below Salesforce’s own five-year historical mean of approximately 45x.
Should EPS growth accelerate to around 13% in FY28 and 19% in FY29, the stock would represent a single-digit earnings multiple on FY29 projections at today’s price — even assuming modest multiple expansion.
Wall Street’s consensus rating is Moderate Buy. Among 37 analyst recommendations issued within the last three months, 27 rate the stock Buy, eight assign Hold ratings, and two recommend Sell. The mean price objective of $260.48 suggests approximately 45% upside potential from current trading levels.
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