Key Takeaways Salesforce is leaning on Agentforce to address the slowing sales growth situation.Agentforce and Data Cloud drove $1.4B in Q3 recurring revenues, with Agentforce up 330% YoY.CRM's CRPO hit $29.4B on larger deals and renewals, with over 50% Agentforce deals from existing clients.Salesforce, Inc. (CRM) is counting on Agentforce to revive growth at a time when its revenue expansion has slowed to single digits. For years, the company has delivered strong double-digit revenue increases. However, th ...

Core Insights - Salesforce, Inc. (CRM) shares increased by 2.1% after reporting better-than-expected earnings for Q3 fiscal 2026 and raising its full-year guidance [1][9] Financial Performance - Salesforce reported non-GAAP earnings of $3.25 per share, exceeding the Zacks Consensus Estimate by 14.04% and reflecting a year-over-year improvement of 34.9% [1][2] - Q3 fiscal 2026 revenues reached $10.3 billion, matching the Zacks Consensus Estimate and showing a 10% year-over-year increase [2][10] - Non-GAAP operating income was $3.64 billion, up 16.5% from the previous year, with an operating margin expansion of 240 basis points to 35.5% [6][12] Revenue Breakdown - Subscription and Support revenues, accounting for 95% of total revenues, increased by 9.5% year over year to $9.73 billion [3] - Professional Services and Other revenues declined by 5.7% to $533 million [3] - Revenues from the Americas grew by 8% to $6.7 billion, EMEA revenues increased by 7% to $2.5 billion, and Asia Pacific revenues rose by 11% to $1.1 billion [6] Segment Performance - Agentforce Sales revenues grew by 8.4% to $2.3 billion, while Agentforce Service revenues increased by 9% to $2.5 billion [5] - Agentforce 360 Platform, Slack and Other revenues rose by 19.5% to $2.18 billion, and Agentforce Integration and Analytics recorded a 6.1% increase to $1.39 billion [5] Guidance Update - Salesforce raised its revenue guidance for fiscal 2026 to a range of $41.45-$41.55 billion, reflecting a 9-10% year-over-year growth [9][10] - The company now expects non-GAAP earnings per share to be in the range of $11.75-$11.77, up from the previous forecast of $11.33-$11.37 [11] - For Q4 fiscal 2026, total sales are projected between $11.13 billion and $11.23 billion, indicating 11-12% growth from the previous year [13] Cash Flow and Shareholder Returns - Salesforce ended Q3 with cash, cash equivalents, and marketable securities totaling $11.32 billion, down from $15.37 billion in the previous quarter [7] - The company generated an operating cash flow of $2.3 billion and a free cash flow of $2.2 billion [7] - Salesforce returned $4.2 billion to shareholders, including $3.8 billion in share repurchases and $395 million in dividends [8]

Core Insights - Salesforce (CRM) is set to release its third-quarter fiscal 2026 results on December 3, with expected revenues between $10.24 billion and $10.29 billion, indicating an 8.7% increase year-over-year [1][9] - The company anticipates non-GAAP earnings per share (EPS) in the range of $2.84 to $2.86, reflecting an 18.3% increase from the previous year [2][9] Revenue and Earnings Estimates - The Zacks Consensus Estimate for third-quarter revenues is $10.26 billion, aligning closely with Salesforce's expectations [1][9] - The consensus estimate for non-GAAP EPS has remained stable at $2.85 over the past 60 days [2] Performance History - Salesforce has beaten the Zacks Consensus Estimate in three of the last four quarters, with an average surprise of 3.2% [3] Factors Influencing Q3 Results - The company is well-positioned for strong results due to its focus on digital transformation and cloud solutions, which align with global business needs [6] - Demand for generative AI-enabled cloud solutions has been a significant growth driver, enhancing customer engagement and competitive positioning [7] - Salesforce's expansion in key geographic markets and the public sector has unlocked new growth opportunities [8] Strategic Acquisitions - Recent acquisitions, including Waii, Convergence.ai, and Zoomin, have enhanced Salesforce's capabilities and diversified its revenue base, likely boosting subscription revenues [10] - Key cloud service revenue estimates for Q3 include $2.3 billion from Sales, $2.49 billion from Service, and $2.07 billion from Platform & Other [11] Cost Restructuring Initiatives - Ongoing cost restructuring is expected to improve profitability, with a non-GAAP operating margin of 34.3% in Q2, up 60 basis points [12] Stock Performance and Valuation - Year-to-date, Salesforce shares have declined by 31.7%, underperforming the Zacks Computer – Software industry, which has risen by 6.6% [13] - The stock is currently trading at a forward 12-month price-to-sales (P/S) ratio of 4.92, compared to the industry average of 7.39 [15] Competitive Position - Salesforce maintains its leadership in the customer relationship management industry, consistently outperforming competitors like Microsoft, Oracle, and SAP [18] - Strategic acquisitions, such as the $27.7 billion acquisition of Slack, have significantly enhanced its market position [19] AI Initiatives - The introduction of Einstein GPT and the expansion of AI functionalities across its ecosystem have solidified Salesforce's competitive edge in the market [20] Conclusion - Despite potential near-term challenges from softening IT spending, Salesforce's leadership in CRM and aggressive AI expansion provide a solid foundation for sustained growth [22]

Core Insights - Adobe's shares have declined 36.3% over the past year, underperforming the Zacks Computer and Technology sector's return of 23.9% and the Zacks Computer – Software industry's appreciation of 9.5% [1][8] - The underperformance is attributed to modest growth prospects due to intense competition in the AI and generative AI sectors from companies like Microsoft, Alphabet, Salesforce, and others [1][15] Financial Performance - Adobe's annual recurring revenues (ARR) influenced by AI surpassed $5 billion, with new AI-first products generating over $250 million in ARR [6][8] - The company raised its fiscal 2025 revenue guidance to between $23.65 billion and $23.7 billion, up from the previous range of $23.5-$23.6 billion [11] - The Zacks Consensus Estimate for fiscal 2025 revenues is pegged at $23.67 billion, indicating a 10.1% growth from 2024 [12] AI Business Growth - Strong demand for AI-powered products like Creative Cloud Pro and Acrobat is driving growth, with monthly active users of Acrobat and Express growing approximately 25% year over year [7][8] - The Creative Professionals segment is benefiting from increased usage of AI in applications like Photoshop and Premiere Pro [8][9] - The integrated GenStudio solution and other AI services now exceed $1 billion in ARR, growing more than 25% year over year [10] Competitive Landscape - Adobe's AI business remains small compared to competitors like Microsoft and Alphabet, which are seeing significant growth in their AI services [15] - Microsoft and Alphabet have reported returns of 17.3% and 68.3%, respectively, while Salesforce has seen a decline of 30% [2][15] Valuation Concerns - Adobe's Value Score is C, indicating a stretched valuation, trading at 11.31X price/book compared to the sector's 10.13X and competitors like Microsoft and Alphabet [16] - The stock is currently trading below the 50-day and 200-day moving averages, suggesting a bearish trend [21]

Core Insights - Salesforce, Inc. (CRM) is experiencing a slowdown in revenue growth, transitioning from double-digit increases to single-digit growth over the past year, prompting a focus on enhancing AI capabilities and the Data Cloud business to regain momentum [1][11] Data Cloud Strategy - The Data Cloud is central to Salesforce's strategy, enabling customer data integration across its products, with a reported 140% year-over-year increase in customer adoption in Q2 of fiscal 2026 [2][11] - Over half of the Fortune 500 companies are utilizing the Data Cloud platform, indicating strong demand from large enterprises for unified data and effective AI usage [2][11] - Salesforce is integrating the Data Cloud with tools like Agentforce, Tableau, and Slack, which is expected to facilitate data analysis and drive higher-value contracts, contributing to top-line growth [3][11] Revenue Generation Potential - Salesforce's data-related business is estimated to generate approximately $7 billion annually, with significant revenue growth potential due to a consumption-based pricing model for the Data Cloud platform [4][11] - The Zacks Consensus Estimate for fiscal 2026 and 2027 indicates year-over-year revenue growth in the high single-digit range, with the impact of Data Cloud adoption on overall revenue expected to be observed in the coming quarters [5][11] Competitive Landscape - Salesforce faces increased competition in the Data Cloud service space from Microsoft Corporation (MSFT) and Snowflake Inc. (SNOW) [6][11] - Microsoft integrates its Azure Data platform with productivity tools like Power Platform and Dynamics 365, leveraging its existing cloud user base to attract new clients [7] - Snowflake focuses solely on data services, offering robust cloud-based data warehousing and analytics tools, which differentiates it from Salesforce [8] Stock Performance and Valuation - Salesforce shares have declined by 31.8% year-to-date, contrasting with a 10.6% growth in the Zacks Computer – Software industry [9][11] - The company trades at a forward price-to-earnings ratio of 18.4, significantly below the industry average of 29.52, indicating potential undervaluation [13] - The Zacks Consensus Estimate for fiscal 2026 and 2027 earnings suggests year-over-year increases of approximately 11.4% and 11.2%, respectively, with recent revisions showing upward adjustments for fiscal 2026 and downward adjustments for fiscal 2027 [16]

Core Viewpoint - Investors in Pegasystems Inc. (PEGA) should closely monitor the stock due to significant movements in the options market, particularly the high implied volatility of the Dec. 19, 2025 $22.50 Put option [1] Group 1: Implied Volatility - Implied volatility indicates the market's expectation of future stock movement, with high levels suggesting anticipation of a significant price change or an upcoming event that could trigger a rally or sell-off [2] - The current high implied volatility for Pegasystems options may signal a developing trading opportunity, as options traders often seek to sell premium on such options to capture decay [4] Group 2: Analyst Sentiment - Pegasystems holds a Zacks Rank 3 (Hold) in the Computer – Software industry, which is in the top 37% of the Zacks Industry Rank [3] - Over the past 60 days, there has been mixed analyst sentiment, with one analyst increasing earnings estimates for the current quarter while two have decreased theirs, resulting in a slight increase in the Zacks Consensus Estimate from 73 cents to 74 cents per share [3]

Core Insights - Salesforce, Inc. (CRM) has experienced a slowdown in growth, transitioning from double-digit revenue increases to single-digit growth over the past year, prompting inquiries about future growth drivers [1][10] - The Data Cloud business is identified as a potential key contributor to restoring double-digit revenue growth, with significant customer adoption and integration with other Salesforce products [1][3][10] Financial Performance - In Q2 of fiscal 2026, Salesforce reported a 140% year-over-year increase in customer adoption of its Data Cloud platform, with over half of Fortune 500 companies utilizing it [2][10] - The Data Cloud business is estimated to generate approximately $7 billion annually, indicating substantial revenue growth potential due to its consumption-based pricing model [4] Competitive Landscape - Salesforce faces competition from Microsoft Corporation (MSFT) and Snowflake Inc. (SNOW) in the data cloud service sector [6] - Microsoft integrates its Azure Data platform with existing productivity tools, enhancing user experience and attracting new clients [7] - Snowflake specializes in cloud-based data warehousing, focusing solely on data management and analytics, which differentiates it from Salesforce [8] Valuation and Estimates - Salesforce shares have declined by 23.8% year-to-date, contrasting with a 21.2% growth in the Zacks Computer – Software industry [9] - The company trades at a forward price-to-earnings ratio of 20.72, significantly lower than the industry average of 33.24 [12] - The Zacks Consensus Estimate for fiscal 2026 and 2027 earnings suggests year-over-year increases of approximately 11.4% and 11.3%, respectively, with recent revisions indicating upward adjustments for fiscal 2026 and downward adjustments for fiscal 2027 [13]

Core Insights - Microsoft's gaming division shows strong performance, with Xbox content and services revenues increasing by 13% year over year in Q4 fiscal 2025, driven by first-party titles and Xbox Game Pass expansion [1][9] Gaming Division Performance - Xbox Game Pass generated nearly $5 billion annually and reached 500 million monthly active users as of June 2025, solidifying its role in Microsoft's recurring revenue model [2] - The gaming division is projected to grow by 2.1% in fiscal 2026 and accelerate to 14.9% in 2027, indicating long-term momentum [4] Innovation and Expansion - Microsoft is enhancing its hardware and cloud offerings, introducing Xbox Cloud Gaming in vehicles through partnerships and launching the ROG Xbox Ally handheld series with Asus [3] Competitive Landscape - Take-Two Interactive is recognized for its blockbuster franchises and strong live-service revenues, with a focus on high-impact IPs and strategic acquisitions [5] - Sony Group Corp. remains a key competitor with its PlayStation ecosystem, premium consoles, and a strong user base of 123 million monthly users [6] Share Price and Valuation - Microsoft's shares have increased by 23.4% year-to-date, outperforming the Zacks Computer – Software industry growth of 20.1% [7] - The company trades at a forward Price/Sales ratio of 11.54X, higher than the industry's 8.54X, indicating a premium valuation [10] Earnings Estimates - The Zacks Consensus Estimate for Microsoft's fiscal 2026 earnings is $15.40 per share, reflecting a 12.90% year-over-year growth [13]

Core Insights - Salesforce has launched the Agentforce 360 platform, aiming to unify human and AI workflows across various business functions, marking a significant step in its AI strategy [1] - The platform builds on previous Agentforce releases and integrates core products like Data Cloud, Customer 360, and Slack into a single AI-driven system [1] Adoption and Growth - In Q2 of fiscal 2026, there was a 60% increase in customers transitioning from pilot projects to full production, with notable enterprises like FedEx, Reddit, and Under Armour leveraging Agentforce for improved operations and sales engagement [2] - Annual recurring revenues from AI and Data Cloud reached $1.2 billion, reflecting a 120% year-over-year increase, indicating strong adoption and growth potential [3] Pricing and Revenue Model - Salesforce introduced a new pricing model called flex credits, which now accounts for approximately 80% of Agentforce bookings, enhancing the scalability of recurring revenues [3] - This pricing strategy is expected to support Salesforce's top-line growth over time [3] Future Outlook - Sustained adoption of Agentforce could signal the beginning of a new growth cycle for Salesforce, with Zacks Consensus Estimates projecting revenue increases of 8.8% and 9.0% for fiscal 2026 and 2027, respectively [4] Competitive Landscape - Competitors like Microsoft and ServiceNow are also advancing AI automation in the enterprise market, with Microsoft integrating AI features into Dynamics 365 and ServiceNow deploying industry-specific AI tools [5][6] Valuation Metrics - Salesforce shares have declined by 28.1% year-to-date, contrasting with a 20.6% growth in the Zacks Computer – Software industry [7] - The company trades at a forward price-to-earnings ratio of 20.28, significantly lower than the industry average of 33.22 [10] Earnings Estimates - The Zacks Consensus Estimate for Salesforce's fiscal 2026 and 2027 earnings suggests year-over-year increases of approximately 11.3% and 11.5%, respectively, with recent revisions indicating upward adjustments for fiscal 2026 and downward for fiscal 2027 [13]

Core Insights - Microsoft is heavily investing in artificial intelligence and cloud infrastructure, planning nearly $30 billion in capital expenditures for Q1 FY26 to enhance data center capacity and GPU availability [1][9] - The company anticipates Intelligent Cloud revenue growth of 25% to 26% and Azure growth of approximately 37% in constant currency for the same period [2][9] - Microsoft's integration of advanced AI tools like GPT-5 and the launch of the Microsoft Agent Framework are key components of its strategy to expand its AI capabilities [3][9] Investment and Growth Strategy - Microsoft aims to solidify its leadership in the AI economy through significant investments in AI and cloud infrastructure, particularly in international markets such as India and the U.K. [2] - The total revenue growth for Microsoft is projected at 13% for FY26 and 14.3% for FY27, aligning with the expanding AI infrastructure market, which is expected to grow at a CAGR of 29.1% from 2025 to 2032 [4] Competitive Landscape - Amazon is increasing its AI investments with nearly $100 billion planned for 2025, focusing on AWS expansion and custom AI chips, which positions it as a strong competitor to Microsoft [5] - Alphabet is also ramping up its AI spending to $85 billion in 2025, leveraging its DeepMind and Google Research capabilities to enhance its AI offerings [6] Financial Performance - Microsoft's share price has increased by 24.5% year-to-date, outperforming the Zacks Computer – Software industry and the broader technology sector [7] - The forward 12-month Price/Sales ratio for Microsoft is 11.68X, indicating a premium valuation compared to the industry average of 8.63X [10] Earnings Estimates - The Zacks Consensus Estimate for Microsoft's fiscal 2026 earnings is $15.41 per share, reflecting a 12.98% year-over-year growth [13]