Key Takeaways CRM shares fell 16.8% in six months as revenue growth cooled to single digits after double-digit gains.CRM's AI push is gaining traction, with Agentforce and Data Cloud delivering $1.4B in Q326 recurring revenues.CRM trades at a 14.69 P/E, well below the sector's 25.91, suggesting much of the pessimism is priced in.Salesforce, Inc. (CRM) shares have plunged 16.8% over the past six months, underperforming the broader Zacks Computer and Technology sector’s gain of 10.8%.The sharp contrast raises ...

Core Insights - SGA's U.S. Large Cap Growth Strategy reported a Q4 2025 portfolio return of 0.3% (Gross) and 0.2% (Net), underperforming the Russell 1000 Growth Index (1.1%) and the S&P 500 Index (2.7%) [1] - The portfolio faced significant challenges in 2025, marking the most difficult year since the firm's inception in 2003, but remains optimistic about growth potential and relative valuation [1] - The strategy is positioned to benefit from a shift away from high momentum dynamics in U.S. markets and a broadening of market leadership [1] Company Focus: Salesforce, Inc. (NYSE:CRM) - Salesforce was highlighted as a top contributor in Q4 2025, despite a one-month return of -19.51% and a 52-week loss of 40.19% [2] - As of February 9, 2026, Salesforce's stock closed at $194.03, with a market capitalization of $184.717 billion [2] - The company demonstrated growth stabilization and momentum, with subscription revenue growth and current remaining performance obligation (cRPO) exceeding guidance [3] - Management is targeting revenue acceleration over the next 12-18 months, supported by increased competitiveness in the SMB segment and the expiration of pandemic-era shelfware deals [3] - Salesforce's AI and Data Cloud offerings are gaining traction, with Agentforce annual recurring revenue growing over 300% and Data Cloud annual recurring revenue more than doubling [3] - The company's integrated front-office applications, strong brand, and high renewal rates continue to drive revenue growth, while disciplined capital allocation and share repurchases enhance shareholder returns [3] - Salesforce is well-positioned to compete in the Agentic AI era, supporting low-teens earnings growth over the next three years [3] - The portfolio maintained an average weight in Salesforce and increased the position by selling other higher multiple software holdings [3]

February 8, 2026 03:47 PM GMT Software | North America Software Gut Check – AI IS Software Peak uncertainty has severely impacted Software multiples, as investor worry about potential AI impacts. GenAI fundamentally expands the capabilities of enterprise software – presenting opportunities along with risks, with the pullback giving attractive entry points in well positioned incumbents. Key Takeaways Setting the Stage – The AI Opportunity in Software. Generative AI represents the continuing expansion of what ...

Snowflake Inc. (NYSE:SNOW) is one of the most promising future stocks to buy now. Bank of America Securities maintained a Buy rating on Snowflake Inc. (NYSE:SNOW) on February 6, setting a price target of $275. Rosenblatt Securities also reaffirmed a Buy rating on Snowflake Inc. (NYSE:SNOW) on February 3. In a separate development, Snowflake Inc. (NYSE:SNOW) announced on February 4 that United Rentals rolled out a new AI agent built on Snowflake Intelligence to operational teams working across 1,600+ bran ...

Core Viewpoint - Snowflake's stock has experienced a slight decline recently, reflecting investor caution regarding tech valuations amidst mixed signals in enterprise spending [3] Group 1: AI Price Prediction - An AI price-prediction model forecasts a modest increase in Snowflake's stock price over the next 60 days, with a base-case projection of $214.21 by mid-April [4][10] - The model suggests that Snowflake could potentially reach $800 by 2030, indicating long-term growth potential [4] Group 2: Revenue Model and Market Position - Snowflake's consumption-based revenue model is a key strength, charging customers based on actual data storage and compute usage, which aligns well with the unpredictable nature of AI workloads [6] - The Data Cloud's capabilities position Snowflake as a critical component for AI data pipelines, facilitating the integration of structured and unstructured data for advanced models [8] - Partnerships with Nvidia and Anthropic have enhanced Snowflake's ability to monetize AI, with committed deals reflecting growth in workload [8] Group 3: Trading and Investment Opportunities - Investors can incrementally build exposure to Snowflake through commission-free fractional shares on platforms like SoFi, starting with as little as $5 [5][9] - Active traders may utilize prop firms such as Apex Trader Funding to access larger funded futures accounts, enhancing trading flexibility [7][9]

Core Insights - Salesforce, Inc. and Adobe Inc. are prominent players in the enterprise software sector, focusing on productivity, customer engagement, and digital transformation [1][2] Salesforce Stock Analysis - Salesforce maintains its leadership in the customer relationship management market and is expanding into a broader ecosystem centered on AI, data, and collaboration through acquisitions [3] - The integration of generative AI, particularly with the rollout of Einstein GPT, is pivotal for Salesforce's growth, enhancing automation and decision-making for businesses [4] - The introduction of Agentforce and Data Cloud has resulted in $1.4 billion in recurring revenues for Q3 FY26, marking a 114% year-over-year increase, with Agentforce alone contributing $540 million, a 330% increase [5] - Financial performance remains strong, with revenues and non-GAAP EPS increasing by 10% and 34.9% year-over-year in Q3 FY26, respectively, surpassing consensus estimates [6] - The total remaining performance obligation (RPO) reached $59.5 billion, up 12% year-over-year, with expectations of a 15% increase in Q4 FY26, indicating ongoing growth [7] - Salesforce is transitioning to a more efficient and profitable enterprise solution provider while maintaining a focus on innovation [8] Adobe Stock Analysis - Adobe is experiencing growth in its AI-powered tools, such as Creative Cloud Pro and Acrobat, with new features enhancing user productivity [9] - The Firefly tool is becoming a significant growth driver within Adobe's creative ecosystem, with new mobile solutions aiding content creation [10] - Financially, Adobe reported a 10.5% increase in revenue and a 14.3% increase in earnings year-over-year for Q4 FY25, exceeding consensus estimates [13] - Adobe targets a 10.2% annualized recurring revenue growth for FY26, driven by its AI portfolio and expanding enterprise adoption, although its AI revenues are small compared to competitors [14] Comparative Growth Outlook - Both companies are leveraging AI, but Salesforce shows slightly stronger near-term growth potential, with consensus estimates indicating 9.53% revenue and 15.29% EPS growth for FY26 compared to Adobe's 9.5% revenue and 12.03% EPS growth [15] - Salesforce's earnings estimate revisions reflect a more bullish outlook from analysts compared to Adobe [15] Stock Performance and Valuation - Over the past three months, Salesforce's stock has declined by 9.8%, while Adobe's has dropped by 15.3%, indicating stronger investor confidence in Salesforce [19] - In terms of valuation, Salesforce trades at 4.67 times forward 12-month sales, slightly lower than Adobe's 4.74 times [20] Final Assessment - Salesforce is positioned as a stronger investment option due to its clearer path to monetizing AI, stronger customer retention, and better margin stability compared to Adobe [23] - Salesforce holds a Zacks Rank 2 (Buy), while Adobe has a Zacks Rank 3 (Hold) [24]

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]

Company Overview - Salesforce, Inc. (CRM) has a market cap of $206.2 billion and is a leader in customer relationship management technology, offering AI-powered solutions such as Agentforce, Data Cloud, Slack, Tableau, and industry-specific applications [1] Financial Performance - Analysts expect Salesforce to report an EPS of $2.14 for fiscal Q4 2026, reflecting a 3.6% decline from $2.22 in the same quarter last year, although the company has exceeded earnings expectations in the past four quarters [2] - For fiscal 2026, analysts predict an EPS of $8.92, which represents a 13.1% increase from $7.89 in fiscal 2025 [3] Stock Performance - Salesforce shares have decreased by 32.2% over the past 52 weeks, underperforming the S&P 500 Index, which gained 13.3%, and the State Street Technology Select Sector SPDR ETF, which returned 21.2% during the same period [4] - Following strong Q3 2026 results, Salesforce shares rose by 3.7%, with reported revenue of $10.26 billion and adjusted EPS of $3.25. The company also raised its full-year 2026 revenue guidance to between $41.45 billion and $41.55 billion, with significant growth in Agentforce and Data 360 ARR, which reached nearly $1.4 billion, up 114% year-over-year [5] Analyst Ratings - The consensus view among analysts on CRM stock remains bullish, with a "Strong Buy" rating overall. Out of 51 analysts, 36 recommend a "Strong Buy," 2 suggest "Moderate Buys," 12 recommend "Holds," and 1 advises a "Strong Sell." The average analyst price target for Salesforce is $331.25, indicating a potential upside of 50.5% from current levels [6]

Summary of Global Software Conference Call Industry Overview - The software industry is experiencing a significant shift in focus from macroeconomic concerns to the disruptive rise of AI, with investor discussions centered around whether an AI bubble exists and the potential impact of AI on enterprise software [1][11][15]. Key Themes for 2026 - **Valuation Reset**: Software valuations have halved over the past year, creating opportunities for investors to acquire high-quality stocks at discounted prices [14][31]. - **IT Spending Outlook**: Recent CIO surveys indicate one of the strongest IT spending outlooks since 2018, with expectations for a stable macro environment and lower interest rates supporting demand, particularly among small and medium-sized businesses (SMBs) [3][13][23]. - **Generative AI Impact**: While Generative AI is a major topic, its actual revenue impact on software companies is still limited. Most companies are not yet seeing significant revenue from AI, and the focus is shifting towards company-specific opportunities [6][15][19]. Company Recommendations - **Buy Recommendations**: - **Oracle (ORCL)**: Strong core business with significant cloud transition and market share gains in IaaS/PaaS, driven by unique offerings [4][27]. - **Microsoft (MSFT)**: Durable business with multiple growth levers and a reset valuation, positioned well for AI monetization [4][27]. - **SAP (SAP)**: Consistent double-digit revenue growth and margin improvement, despite AI cycle noise [4][27]. - **HubSpot (HUBS)**: Attractive entry point with strong SMB market positioning and potential benefits from AI adoption [4][27]. - **Cautionary Recommendations**: - **Salesforce (CRM)**: Concerns over underperformance and potential reliance on acquisitions to drive growth [4][29]. - **Snowflake (SNOW)**: Long-term growth concerns due to market saturation and competitive pressures [4][30]. - **Workday (WDAY)**: Growth deceleration and investor skepticism regarding AI's impact on its business model [4][28]. Financial Metrics - **Valuation Comparisons**: - Adobe (ADBE): Adjusted P/E ratios have decreased significantly, with a current valuation of 12.0x for 2026E [5][32]. - Microsoft (MSFT): Current P/E at 27.5x for 2026E, reflecting a reset from previous highs [5][32]. - Oracle (ORCL): Trading at a 0.9x PEG ratio, down from 1.4x a year ago, indicating a significant valuation adjustment [32]. Macro Considerations - **Economic Environment**: The macroeconomic landscape is expected to stabilize, with potential benefits from deregulation and tax cuts in the U.S. impacting SMB spending positively [6][23]. - **AI Adoption Timeline**: Enterprise adoption of AI is anticipated to take longer than expected, with significant visibility likely not occurring until 2027 or 2028 [22][23]. Conclusion - The software sector is at a pivotal moment, with significant valuation resets providing investment opportunities. However, the actual impact of AI on revenue generation remains uncertain, necessitating a cautious approach to investment in this space. The focus should be on companies with strong fundamentals and clear growth trajectories amidst the evolving landscape of AI and macroeconomic conditions [1][14][19].

Core Viewpoint - Snowflake Inc. (NYSE:SNOW) is currently viewed as a strong investment opportunity, particularly following its strategic acquisition of Observe, which enhances its AI Data Cloud capabilities [1][3]. Company Developments - On January 8, 2026, Snowflake announced the acquisition of Observe, a leader in AI-powered observability, which will allow enterprises to combine telemetry and business data for faster troubleshooting [3]. - The integration of Observe's technology enables anomaly detection and efficient resolution of production issues, leveraging an AI Site Reliability Engineer (SRE) that consolidates logs, metrics, and traces [3]. - The platform supports open standards like Apache Iceberg and OpenTelemetry, facilitating large-scale retention of telemetry data, which is increasingly important as AI applications generate vast amounts of data [4]. Market Potential - Snowflake aims to tap into the $51.7 billion IT operations management market with its enhanced capabilities following the acquisition of Observe [4]. Analyst Sentiment - Analyst opinions on Snowflake are mixed; Barclays downgraded the stock to 'Equal Weight' due to a 42% price rally in 2025, suggesting the current valuation is stretched [5]. - Conversely, Goldman Sachs initiated coverage with a 'Buy' rating and a price target of $286, highlighting AI adoption and data platform modernization as significant growth drivers [5]. Business Focus - Snowflake is dedicated to providing cloud-native data warehousing through its Data Cloud, enabling secure and scalable development of AI, analytics, and data applications globally [6].