Salesforce Bets on Agentic AI: Will It Reignite CRM's Revenue Growth?

Core Insights - Salesforce, Inc. is focusing on Agentic AI to boost revenue growth as its revenue expansion has slowed to single digits, with year-over-year revenue increases of 7.6%, 9.8%, and 8.6% in the first three quarters of fiscal 2026 [1][10] Group 1: Agentic AI and Revenue Growth - Agentic AI automates tasks, generates insights, and aids decision-making, enhancing workflow efficiency and predictability [2] - The Agentforce suite is central to Salesforce's Agentic AI strategy, generating $1.4 billion in recurring revenues in Q3 of fiscal 2026, a 114% year-over-year increase, with Agentforce alone contributing $540 million, marking a 330% year-over-year increase [3][10] - The current remaining performance obligation stands at $29.4 billion, an 11% year-over-year increase, driven by larger deals and early renewals, with over 50% of Agentforce deals coming from existing clients [4][10] Group 2: Competitive Landscape - Microsoft and ServiceNow are also advancing AI automation in the enterprise market, with Microsoft integrating AI features into Dynamics 365 and ServiceNow using AI for IT service management and customer support [6][7] Group 3: Financial Performance and Valuation - Salesforce shares have decreased by 33.7% over the past year, compared to a 4.7% decline in the Zacks Computer – Software industry [8] - The forward price-to-earnings ratio for Salesforce is 17.10, significantly lower than the industry average of 26.22 [12] - The Zacks Consensus Estimate indicates revenue growth of 9.5% and 11% for fiscal 2026 and 2027, respectively, with earnings expected to increase by approximately 15.3% and 10.5% year-over-year for the same periods [5][15]