Key Highlights
- CRM shares advanced approximately 3.4% to reach $179.73 as market concerns about artificial intelligence undermining traditional SaaS providers started to diminish.
- The combined annual recurring revenue from Agentforce and Data Cloud reached $2.9 billion, with Agentforce specifically surging 169% year-over-year to $800 million.
- Fourth-quarter results showed Salesforce expanding revenue at a low double-digit pace while non-GAAP earnings per share soared 37% compared to the prior year.
- The stock currently trades at approximately 12.7x forward earnings — roughly 40% below typical software industry multiples — indicating substantial bearish sentiment is already reflected in the price.
- Analyst consensus rates CRM a Moderate Buy with a mean price target of $260.48, representing approximately 45% potential upside from present levels.
Shares of Salesforce (CRM) gained 3.44% on Monday, finishing at $179.73 as investors reassessed the severity of AI-related risks facing enterprise software providers. The stock has declined 29.1% since the beginning of the year and remains 37.6% below its 52-week peak of $288.06 reached in May 2025.
The rally occurred as market observers began reevaluating whether artificial intelligence truly represents the existential threat to established SaaS businesses that many initially anticipated. This worry — frequently dubbed the “SaaS Rout of 2026” — had pressured the sector considerably in recent months.
Positive developments from industry competitors supported the broader sentiment adjustment. Figma disclosed 46% revenue expansion alongside promising early AI monetization results. ServiceNow unveiled a multi-year artificial intelligence collaboration with Experian. These announcements strengthened the argument that enterprise software firms are successfully integrating AI capabilities rather than facing displacement.
Salesforce had also benefited three days prior, posting a 4.2% gain when the Trump-Xi summit in Beijing elevated technology sector optimism generally, briefly pushing the S&P 500 above 7,500. While the summit yielded limited tangible agreements, it positively influenced trade-related sentiment.
Agentforce Demonstrates Compelling Momentum
Salesforce is doing more than protecting its foundational CRM operations. With Agentforce, the organization enables clients to create and implement AI agents for functions including customer service, IT assistance, and billing management.
The performance metrics are striking. Agentforce and Data Cloud collectively achieved $2.9 billion in annual recurring revenue, posting growth exceeding 200% year-over-year. Agentforce independently generated $800 million in ARR, representing 169% growth.
The source of this expansion is particularly noteworthy. Over 60% of recent bookings originated from current customers — indicating Salesforce is successfully deepening relationships within its existing base rather than depending exclusively on acquiring new clients. This demonstrates product retention strength, not market weakness.
The Informatica acquisition contributes to this narrative. It facilitates the organization and refinement of enterprise data, enabling AI agents to function more effectively across customer environments.
Fourth-quarter performance supported these trends. Subscription and support revenue — comprising roughly 95% of total revenue — expanded 13% year-over-year. Non-GAAP EPS increased 37%. These figures don’t reflect a company experiencing fundamental disruption.
However, Current Remaining Performance Obligation advanced only 9% in organic constant-currency terms after adjusting for foreign exchange impacts and the Informatica addition. Reported metrics present a somewhat rosier picture.
Current Valuation Reflects Significant Pessimism
For fiscal year 2027, Salesforce projected revenue of $46 billion at the midpoint — representing 11% growth — alongside non-GAAP EPS of roughly $13.15, indicating approximately 5% expansion. Informatica contributes about 3 percentage points of that growth.
Trading at roughly 12.7x forward earnings, CRM operates at a 40% discount relative to the software sector average of approximately 25x. The multiple sits more than 60% below Salesforce’s own five-year historical average of around 45x.
Should EPS growth reaccelerate to approximately 13% in FY28 and 19% in FY29, the shares would trade at a single-digit multiple based on FY29 earnings at today’s price — even accounting for a modest valuation expansion.
Wall Street maintains a Moderate Buy consensus. Among 37 analyst assessments from the past three months, 27 recommend Buy, eight suggest Hold, and two advise Sell. The average price objective of $260.48 suggests roughly 45% upside from current trading levels.
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