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Salesforce Bets on Agentforce 360: Will it Spark the Next Growth Leg?
ZACKS· 2025-10-15 15:02
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]
Will Microsoft's $30B AI Build-Out Power Its Next Growth Phase?
ZACKS· 2025-10-09 17:56
Key Takeaways Microsoft plans nearly $30B in Q1 FY26 capex to boost AI and cloud infrastructure.Intelligent Cloud revenues are projected to grow 25%-26%, with Azure up about 37% in constant currency.New AI tools like GPT-5 integration and the Microsoft Agent Framework expand Microsoft's AI reach.Microsoft (MSFT) is betting big on artificial intelligence and cloud infrastructure to drive its next phase of growth. The company plans to ramp up capital expenditures to nearly $30 billion in the first quarter of ...
Blackbaud Launches Intelligent AI Innovations for Social Impact
ZACKS· 2025-10-09 15:06
Core Insights - Blackbaud, Inc. has concluded its annual technology conference, bbcon 2025, focusing on the role of AI in enhancing social impact through a vast network of organizations and causes [1] Group 1: Innovations and AI Developments - Blackbaud introduced two major innovations: transforming Blackbaud AI into a system of intelligent action and launching Blackbaud Agents for Good, which are proactive virtual team members [2][3] - New AI-driven features include donor stewardship reports, Recognition Programs, and hyper-personalized donor journeys aimed at enhancing engagement and loyalty [2][9] - Over 70 sector-specific AI capabilities were showcased, including the Development Agent for managing donor portfolios and Prospect Insights Pro for predictive analytics [4] Group 2: Financial Projections - For the full year 2025, Blackbaud projects GAAP revenues between $1.120 billion and $1.130 billion, indicating approximately 5% organic growth at the midpoint [7] - Non-GAAP EPS is anticipated to be between $4.30 and $4.50, an increase from earlier expectations of $4.16-$4.35 [7] Group 3: Company Strategy and Focus - Blackbaud is concentrating on cloud software solutions and data-driven decisions, leveraging AI, machine learning, and predictive analytics [6] - The company is committed to margin expansion opportunities while investing in innovation, AI, and cybersecurity [6] Group 4: Stock Performance - Blackbaud currently holds a Zacks Rank 3 (Hold), with shares declining 23.5% over the past year, contrasting with a 22.9% growth in the Computer – Software industry [8]
CRM's AI and Data Cloud ARR Surges 120%: Can the Momentum Continue?
ZACKS· 2025-09-23 14:21
Key Takeaways CRM's AI and Data Cloud ARR hit $1.2B in Q2 fiscal 2026, up 120% year over year.Data Cloud reached $7B, with 140% customer growth and 326% surge in data usage.Agentforce signed 6,000 paid deals, with 60% moving from pilot projects to full production.Salesforce, Inc. (CRM) posted strong results in its AI and Data Cloud businesses. In the second quarter of fiscal 2026, the company's Annual Recurring Revenue (ARR) from AI and Data Cloud reached $1.2 billion, up 120% from last year. During the sec ...
Microsoft's Intelligent Cloud Expands Rapidly: Can the Upside Persist?
ZACKS· 2025-09-16 18:11
Core Insights - Microsoft's Intelligent Cloud segment is experiencing significant growth, with Q4 fiscal 2025 revenues reaching $29.9 billion, a 26% increase year over year, and Azure services growing by 39% [1][10] - The company is enhancing its AI capabilities with innovations such as the rollout of GPT-5 and the opening of a new datacenter in Austria, which positions it to capture rising AI demand [2] - AI is identified as the primary growth driver, with strong demand for AI infrastructure and increased adoption of tools like GitHub Copilot and Microsoft 365 Copilot [3] Financial Performance - Management has guided Intelligent Cloud revenues for Q1 fiscal 2026 to be between $30.1 billion and $30.4 billion, indicating continued strength [4] - The Zacks model projects Intelligent Cloud revenues to grow by 20.7% in fiscal 2026 and 21.2% in fiscal 2027, supporting a positive long-term outlook [4] Capital Expenditure and Investment - Microsoft has recorded a capital expenditure of $24.2 billion, with plans to increase this to $30 billion in Q1 fiscal 2026 to expand AI infrastructure and data centers [5] Competitive Landscape - Amazon Web Services (AWS) leads the cloud market with a 30-32% share, but Microsoft Azure is gaining traction in enterprise and hybrid adoption [6] - Google Cloud is also rapidly growing, achieving 32% annual growth and $13.6 billion in quarterly revenues, positioning itself as a strong competitor to both Microsoft Azure and AWS [7] Share Price and Valuation - Microsoft shares have appreciated by 22.2% year-to-date, outperforming the Zacks Computer – Software industry and the broader Computer and Technology sector [8] - The company trades at a forward Price/Sales ratio of 11.45X, higher than the industry average of 8.55X, indicating a premium valuation [12] Earnings Estimates - The Zacks Consensus Estimate for Microsoft's fiscal 2026 earnings is $15.35 per share, reflecting a 12.54% year-over-year growth [15]
Salesforce's Data Cloud Adoption Jumps 140%: Will It Aid Sales Growth?
ZACKS· 2025-09-15 16:20
Core Insights - Salesforce, Inc. (CRM) reported a 10% year-over-year revenue increase to $10.25 billion in Q2 of fiscal 2026, driven by significant growth in its Data Cloud business, which saw a 140% increase in customer count year-over-year [1][10] - The Data Cloud platform is central to Salesforce's growth strategy, integrating customer data from various sources and enhancing usability across Salesforce products, with over half of the Fortune 500 already utilizing it [2] - Integration of Data Cloud with tools like Agentforce, Tableau, and Slack is expected to enhance data activation and AI application across enterprises, potentially leading to higher contract values and stronger customer relationships [3] Financial Performance - Salesforce's data-related business is estimated to generate around $7 billion annually, with a consumption-based pricing model indicating significant revenue growth potential for the Data Cloud platform [4] - Despite the robust performance of the Data Cloud, overall revenue growth for Salesforce has shown signs of deceleration, with Q1 and Q2 revenues increasing by 8% and 10% year-over-year, respectively, and high single-digit growth expected for fiscal 2026 and 2027 [5] - The Zacks Consensus Estimate projects a year-over-year earnings increase of approximately 11.2% for fiscal 2026 and 11.7% for fiscal 2027, with upward revisions in estimates over the past 30 days [13] Competitive Landscape - Salesforce faces increased competition in the data cloud space from Microsoft and Snowflake, with Microsoft leveraging its Azure Data platform and integrating it with productivity tools to enhance user experience [6][7] - Snowflake focuses solely on data services, providing powerful cloud-based data warehousing capabilities, which allows for easy storage, processing, and sharing of large data volumes [8] Valuation Metrics - Salesforce shares have declined by 27% year-to-date, contrasting with the Zacks Computer – Software industry's growth of 18.7% [9] - The company trades at a forward price-to-earnings ratio of 19.96, significantly below the industry average of 33.11 [11]
Oracle's Monster Rally Puts These ETFs in Focus
ZACKS· 2025-09-11 11:41
Core Insights - Oracle's stock surged approximately 36% on September 10, 2025, following the announcement of significant cloud demand numbers, marking its best day since 1992 [1] - The company reported $455 billion in remaining performance obligations (RPO), reflecting a 359% increase year-over-year [1][2] Financial Performance - Oracle's quarterly adjusted earnings were $1.47 per share, consistent with Zacks Consensus Estimate, compared to $1.39 per share a year prior [5] - The company reported revenues of $14.93 billion for the quarter, slightly missing the Zacks Consensus Estimate by 0.59%, compared to $13.31 billion in the previous year [5] Cloud Infrastructure Growth - Oracle anticipates a 77% increase in cloud infrastructure revenues for the fiscal year, projecting $18 billion, up from $10 billion last year [3] - By fiscal 2027, cloud infrastructure revenues are expected to reach $32 billion, with projections of $73 billion, $114 billion, and $144 billion in the following three years [3][4] - Overall, cloud infrastructure revenues are projected to increase by 1298% from 2025 to 2030, with most of this revenue already reflected in the reported RPO [4] AI Developments - During the quarter, Oracle announced the deployment of OpenAI GPT-5 across its database portfolio and SaaS applications [6] - The company expanded its partnership with Google Cloud to provide access to advanced AI models via OCI Generative AI service [6] Valuation Metrics - As of September 5, 2025, Oracle's stock had a forward P/E multiple of 29.88, lower than the Computer – Software industry average of 33.34 and the S&P 500's P/E of 22.1 [7] - Over the past five years, Oracle's stock has traded between a high of 35.93 and a low of 14.17, with a five-year median of 20.88 [8] - The stock has increased by 119.1% over the trailing 12-month period, including the significant gains on September 10, 2025 [8] Market Position and Future Outlook - Analysts from Bank of America noted Oracle's "exceptional backlog," positioning it as a key player in the AI infrastructure market [9] - There is an expectation of stock upgrades from analysts in the near future, despite concerns regarding profitability in the AI segment [9]
Salesforce's Agentforce Bookings Surge: Will Adoption Drive Revenues?
ZACKS· 2025-09-10 15:30
Core Insights - Salesforce, Inc. (CRM) reported strong second-quarter fiscal 2026 results with revenues increasing by 10% and non-GAAP EPS rising by 13.7% year-over-year, driven by the adoption of its AI-driven platform, Agentforce [1][10] Group 1: Agentforce Performance - Agentforce has achieved over 6,000 paid deals since its launch three quarters ago, indicating robust demand for AI tools that enhance enterprise workflows [2][10] - 40% of new Agentforce bookings in the second quarter originated from existing Salesforce customers expanding their usage, showcasing strong early adoption [2][3] - There was a 60% increase in customers scaling Agentforce use quarter over quarter, reflecting confidence in the platform's value [3] Group 2: Revenue Growth Potential - The consumption-based model, along with flexible payment options like Flex Credits, is driving demand for Agentforce, which could lead to recurring revenue growth over time [4] - Annualized recurring revenues from AI and Data Cloud have reached $1.2 billion, positioning Salesforce for significant growth if Agentforce adoption continues at the current pace [5] Group 3: Competitive Landscape - Microsoft Corporation (MSFT) and ServiceNow, Inc. (NOW) are also advancing AI automation in the enterprise market, with Microsoft integrating AI features into its Dynamics 365 platform and ServiceNow rolling out industry-specific AI tools [6][7] Group 4: Valuation and Estimates - Salesforce shares have declined by 24.6% year-to-date, contrasting with the Zacks Computer – Software industry's growth of 15.3% [8] - The forward price-to-earnings ratio for Salesforce is 20.81, significantly below the industry average of 32.22, indicating potential undervaluation [11] - The Zacks Consensus Estimate for fiscal 2026 and 2027 earnings suggests year-over-year increases of approximately 11.2% and 11.7%, respectively, with recent upward revisions in estimates [14]
Is INTU Stock a Buy, Hold or Sell After Its 12.8% Plunge in 3 Months?
ZACKS· 2025-09-04 16:46
Core Insights - Intuit Inc. has reported strong fiscal fourth-quarter and full-year 2025 results, yet its shares have declined by 12.8% over the past three months, underperforming the broader market and peers [1][2]. Financial Performance - Full-year revenues for fiscal 2025 increased by 16% to $18.8 billion, with fourth-quarter revenues surging by 20% to $3.8 billion [5][9]. - GAAP operating income grew by 36% to $4.9 billion, and non-GAAP EPS advanced by 19% to $20.15 [5]. Growth Drivers - The launch of a virtual team of AI agents is expected to drive significant growth across QuickBooks, TurboTax, and the broader ecosystem, with early adoption rates exceeding expectations [6]. - Intuit is making strides in the $89 billion mid-market total addressable market (TAM) through its Intuit Enterprise Suite and QuickBooks Online Advanced, with fourth-quarter billed customers nearly doubling compared to the third quarter [7]. Segment Performance - TurboTax Live revenues increased by 47% for the full fiscal year, with customer growth of 24%, while Credit Karma revenues rose by 32% [7][10]. - The Consumer Group's performance is enhancing year-round engagement and monetization opportunities beyond the tax season [10]. Challenges - Mailchimp is a drag on performance, with expectations for it to return to double-digit growth only by the end of fiscal year 2026 [12]. - International growth has lagged, limiting diversification, and Intuit's performance is tied to small-business health and consumer spending dynamics [12]. Valuation and Market Position - Intuit currently trades at a forward Price/Sales (P/S) ratio of 8.75X, which is above the industry average of 8.33X [13]. - Compared to peers, Intuit trades at a discount to Autodesk but at a premium to Commvault Systems [13]. Strategic Outlook - Intuit is positioned well for sustained growth due to its durable moats in tax, accounting, and consumer finance, alongside solid cash flow and manageable debt [14]. - Despite the recent pullback improving entry points, the stock's valuation premium and macro risks temper near-term upside, suggesting a prudent hold strategy until more favorable conditions arise [15].
MSFT Challenges GPT-5 With New AI Models: What's Next for Investors?
ZACKS· 2025-09-01 16:31
Core Insights - Microsoft has introduced its first proprietary AI models, MAI-Voice-1 and MAI-1-preview, marking a strategic shift to reduce reliance on external AI providers like OpenAI's GPT-5 [1][11] - The launch of these models positions Microsoft as a direct competitor in the AI model space, rather than just a distributor [1] AI Model Performance - MAI-Voice-1 can generate one minute of audio content in under one second using a single GPU, which could significantly lower operational costs for AI services [2] - MAI-1-preview is a mixture-of-experts model trained on approximately 15,000 NVIDIA H100 GPUs, entering public testing on LMArena, indicating Microsoft's confidence in competing with established players [3] Capital Expenditure and Strategic Positioning - Capital Expenditure (CapEx) reached $24.2 billion in the fiscal fourth quarter and is projected to hit a record $30 billion in the first quarter of fiscal 2026, primarily for AI infrastructure [4] - This investment aims to establish Microsoft as a key player in the global AI market, which is expected to grow into trillions over the next decade [4] Competitive Landscape - The timing of the AI model releases coincides with increasing competition in the AI model market, where control over foundational technology is crucial for market positioning [5] - Microsoft's investment in training infrastructure, including operational GB200 clusters, reflects its commitment to this strategic pivot [5] Future Growth Projections - Success in developing proprietary AI models could enhance Microsoft's competitive advantage in the AI services market and improve unit economics across its AI product portfolio [6] - Zacks forecasts a 14% annual revenue growth for Microsoft in 2026 and 14.4% in 2027, highlighting the potential impact of AI-driven CapEx on future success [6] Comparison with Rivals - Meta Platforms is pursuing a similar strategy with its LLaMA family of models, investing in custom silicon and training infrastructure to reduce external dependencies [7] - Alphabet's Google is also focusing on internal AI development through its Gemini models, with a planned increase in spending to $85 billion by 2025 to support proprietary research [8] Share Price Performance - Microsoft shares have appreciated 20.2% year-to-date, outperforming the Zacks Computer – Software industry growth of 15.8% and the Zacks Computer and Technology sector's growth of 12.9% [9]