Salesforce

Salesforce reported strong Q4 results with revenue and EPS exceeding expectations, driven by its AI platform Agentforce. However, shares fell due to investor concerns about AI’s impact on enterprise software. While Agentforce shows rapid adoption, concerns remain about organic growth and GAAP margins. The company announced a significant stock repurchase program. Guidance for FY27 was mixed, with revenue estimates met but operating margin and GAAP EPS falling short.

Salesforce shares fell 5% in after-hours trading despite strong Q4 fiscal 2026 results, including revenue exceeding expectations. The dip was triggered by fiscal 2027 revenue guidance falling slightly short of projections, and broader AI concerns impacting software stocks. The company also announced a $50 billion share buyback and a raised long-term revenue target.

Over 1,400 Salesforce employees have signed an open letter to CEO Marc Benioff, demanding an end to any business with U.S. Immigration and Customs Enforcement (ICE). Employees are concerned that Salesforce’s AI technology is being pitched to ICE for agent recruitment and vetting. The letter calls for a public denouncement of ICE’s actions and a halt to all ICE-related pitches. This follows similar tech industry protests and recent controversial ICE operations. The employees seek transparency and alignment with company ethics, referencing Benioff’s own philosophy on business as a platform for change.

Enterprise software stocks are showing signs of recovery, with Morgan Stanley suggesting attractive entry points for Microsoft and Salesforce. Despite investor concerns about AI’s potential to disrupt coding and boost productivity, leading to reduced software reliance, Morgan Stanley believes these tech giants are well-positioned. They argue that AI advancements validate software’s value and that companies have historically adapted pricing models. The firm sees Microsoft and Salesforce as strong franchises with compelling valuations, noting that AI’s impact on software development is part of a long-term trend, and the third-party software market has thrived despite open-source options.

Salesforce is embedding generative AI into Slack, enhancing Slackbot for Business+ and Enterprise+ subscribers. This AI-powered bot understands conversational context and accesses data from connected services, aiming to reduce communication chaos. Salesforce believes this integrated approach offers an advantage over standalone AI tools by leveraging proprietary business data and internal workflows securely. This strategic move, reportedly the fastest feature rollout in Salesforce history, seeks to boost user engagement and productivity.

Salesforce’s stock rose 5% on Friday, extending a 13% gain over five days after the company posted Q3 adjusted earnings of $3.25 per share (vs. $2.86 estimate) and revenue of $10.26 billion, just below forecasts. CEO Marc Benioff emphasized AI as a growth driver, highlighted acquisitions of Regrello and Waii, and pointed to the Agentforce platform, whose ARR jumped 330% to $540 million. Analysts are optimistic about Salesforce’s AI‑enhanced roadmap, cost discipline, and potential to lead the cloud‑software sector.

U.S. equities were flat as mixed labor data left markets cautious and overbought. Meta jumped ~4% after cutting its metaverse unit to focus on ads and AI, while Costco’s comparable sales fell slightly, keeping its valuation high despite solid same‑store growth. Salesforce beat earnings but missed revenue forecasts, flagging AI‑driven pressure on its licensing model. Cramer highlighted Snowflake, Five Below, Hormel, PayPal and Kroger as potential movers, and his charitable trust remains long on META, CRM and COST. Trade alerts face mandatory 45‑minute and 72‑hour waiting periods before execution.

Salesforce’s fiscal Q3 beat EPS expectations ($3.25 vs. $2.86) with $10.26 bn revenue, an 8.6% YoY rise, and net income up to $2.09 bn aided by a $263 m investment gain. The company highlighted accelerated cloud adoption for Tableau and MuleSoft, and forecast FY Q4 revenue of $11.13‑$11.23 bn with adjusted EPS of $3.02‑$3.04. Growth is driven by AI‑focused acquisitions (Regrello, Waii), the new Agentforce platform, and the $8 bn Informatica deal. Despite a 29% stock decline this year, free cash flow grew 22% to $2.18 bn, though below consensus.

This Monday’s focus is on Salesforce (CRM) and Goldman Sachs (GS). Analysts have mixed views on Salesforce’s future due to concerns about AI’s impact, despite reaffirming “Buy” ratings. CRM’s stock is down 29% YTD, highlighting investor uncertainty. Goldman Sachs is dominating M&A, capturing a 34% market share and advising on significant deals. GS is on track for its best M&A performance in 25 years, with its stock up nearly 35% YTD. The key is if GS can maintain dominance amidst evolving economic conditions.

HubSpot appointed Meta’s Clara Shih, a business AI expert, to its Board, signaling a renewed focus on AI integration. Shih, formerly CEO of Salesforce AI, brings extensive experience in developing AI-powered business tools. This move comes as HubSpot aims to demonstrate AI’s transformative potential to investors amid concerns about AI’s disruptive impact and decelerating revenue growth. HubSpot has also introduced AI tools and acquired XFunnel, reinforcing its commitment to AI-driven marketing and sales solutions. The appointment underscores HubSpot’s strategic push to leverage AI for efficiency and sustained expansion.