This Cloud Veteran Has a Silver Lining As An AI Comeback Story

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What Just Happened

Salesforce (CRM) just dropped a quarter that was quietly solid rather than explosive.

• Adjusted EPS was about 3.25 versus roughly 2.86 expected

• Revenue landed near 10.26 billion, up around 9% year over year and essentially in line

• Net income climbed to just over 2.0 billion, helped by gains on strategic investments

• Free cash flow came in around 2.18 billion, up 22% year over year but a little below what some were hoping for

For the current quarter, management guided to:

• Adjusted EPS of about 3.02 to 3.04

• Revenue of roughly 11.13 to 11.23 billion, ahead of the 10.9 billion Street view

They also nudged up the full-year fiscal 2026 revenue forecast to about 41.45 to 41.55 billion.

The AI angle is finally showing up in real numbers. Agentforce is now doing more than 500 million in annualized revenue, and AI plus data products together are around 1.4 billion of recurring revenue.

The catch? The stock is still down close to 28% this year, while broader tech is comfortably green.

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The Strategy

The mission is simple to say, messy to do.

• Keep being the system of record where sales, service, and marketing teams live all day

• Pour customer data into Data Cloud so it is actually usable

• Let Agentforce sit on top of that and handle more of the grunt work: drafting emails, answering tickets, chasing renewals, nudging deals

Informatica is there to clean and connect data from all the random systems companies already use.

Smaller AI acquisitions like Regrello and Waii help with automation and querying.

Put it together and the pitch is: you already run your go-to-market on this platform, now let AI agents do more of the work so your humans can deal with the weird edge cases.

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Why The Stock Looks Banged Up

So why is the share price acting like this is a tired old SaaS name?

• Growth is fine, not thrilling. High single-digit to low double-digit revenue growth is solid, but it does not scream AI rocket ship.

• AI is still a slice, not the main course. A few hundred million of AI revenue inside a 40 billion-plus business is progress, not transformation.

• Competition is everywhere. Microsoft, ServiceNow, Oracle and others are all pushing their own AI assistants into the same budgets.

• Earlier guidance missteps hurt trust. A couple of cautious outlooks earlier in the year made investors wonder if this is now more bond proxy than growth stock.

• The starting valuation was rich. Coming into 2025, expectations were high, so even normal execution felt disappointing.

Right now, the chart is telling the story of a de-rated blue chip more than a life-changing AI winner.

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The Good Stuff You Can Bank On

• Huge, sticky customer base
  Salesforce still runs the daily workflow for a lot of sales and support teams. That distribution channel for new AI and data products is a real asset.
  

• AI adoption with actual contracts
  Agentforce crossing 500 million in annualized revenue and AI plus data ARR at roughly 1.4 billion means customers are signing and paying, not just kicking the tires.
  

• Cash engine is working
  Free cash flow of more than 2 billion in a quarter, up faster than revenue, gives fuel for buybacks, dividends, acquisitions, and R&D without starving anything.
  

• Guidance is moving up, not down
  Raising the full-year outlook in a choppy macro is a quiet but important vote of confidence from management.
  

• Data as a moat
  If Salesforce can be the place where messy enterprise data gets cleaned up and wired into AI agents, that becomes a long-lasting edge rather than a one-quarter story.