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I knew it was going to be a spicy time at Salesforce’s (CRM) annual Dreamforce event when I left my suitcase in a JFK convenience store because I was too busy working in my head. I got the suitcase, but only after I had already walked halfway to my gate.
And spice is what I got when it was all said and done.
Ahead of the event, Salesforce co-founder and CEO Marc Benioff tossed his support behind President Trump in a New York Times interview. He said the president is doing a great job and that he would be open to the National Guard being sent to San Francisco to address ongoing crime. (Note: Benioff now mostly resides in Hawaii, where he is also registered to vote.)
The callout shocked local lawmakers and many in his influential network. Benioff — who owns Time Inc. — has sought to publicly stay out of politics, has been viewed as pro-left, and has invested huge sums of money in the city.
Although Benioff did travel with Trump and other CEOs to the UK for the state dinner with King Charles.
People I talked to were taken aback by Benioff’s National Guard comments. (But not on the president doing a great job — a lot of CEOs have been quite pleased by what he’s achieved business-wise.)
They’re not canceling their business with Salesforce or slamming AI software play Agentforce, but they’re feeling let down by a leader who has championed stakeholder capitalism, saving Earth’s natural resources, and ensuring diversity for years.
These comments hung over Dreamforce like a black cloud.
With these headlines swirling, I found it rather unfortunate that a scheduled interview I had with Benioff on Tuesday got canceled midway through the day. Efforts to make the interview happen on Wednesday were unsuccessful. I will leave it at that.
By Thursday, Benioff’s comments appeared to have cost him a longtime relationship. Venture capitalist Ron Conway reportedly slammed Benioff’s comments in an email to him. Conway had been a member of the Salesforce Foundation board for a decade.
Conway didn’t return my request for comment.
Again, lots of spice.
The company did try to bring the energy. Salesforce unveiled voice capabilities as part of Agentforce, and new deals with OpenAI (OPAI.PVT) and Anthropic (ANTH.PVT). OpenAI’s latest GPT-5 model and Anthropic’s Claude model will be embedded into Salesforce’s ecosystem. This enables employees and consumers to interact with customer data and analytics in ChatGPT, Slack, and other Salesforce software.
The company outlined revenue guidance of $60 billion-plus by the end of fiscal year 2030 — resulting from a 10%-plus organic revenue growth rate. This is bold guidance, underpinned by Salesforce’s unyielding belief in Agentforce. Note that Salesforce’s constant currency sales have grown less than 10% for the past five quarters.
And the company will miss its $50 billion fiscal year 2026 revenue target issued in 2020 and reiterated in 2021 and 2022. Its current guidance calls for fiscal year sales of $41.3 billion.
All this arrives as Salesforce sits at a crossroad.
Its stock has lost 26% this year with lukewarm earnings reports, while other tech companies participate in the AI rally. Benioff mentor Larry Ellison’s Oracle (ORCL) has seen a reversal of fortune, with the stock exploding 88%.
Salesforce stock popped 8.5% on Thursday as investors digested the fresh long-term outlook — but the shares finished the day up only 3.98%.
Growing concern on the Street centers around the pace of AI demand by corporations. There are also fears around how AI will challenge traditional software.
Why do we need software companies when ChatGPT is going to do all this stuff? That’s the current groupthink on the Street.
The worries show in Salesforce’s valuation. At a forward price-to-earnings ratio of 18.8 times, Salesforce’s stock trades at a discount to the S&P 500’s (^GSPC) multiple of 24 times. Rival Microsoft’s (MSFT) forward PE is 33 times. The aforementioned Oracle fetches 43 times.
The company tried to squash these concerns at Dreamforce by providing examples of Agentforce driving productivity for companies like PepsiCo (PEP) and Dell (DELL). The tech all works nicely.
But I didn’t get the sense that people want to hand over giant checks for Agentforce today. One top leader told me they are using Microsoft’s Copilot instead. Another didn’t know much about Agentforce yet.
And a lot of this meh-ness got picked up in the Street commentary:
-
Guggenheim: “A lot of the growth expectation hinges on the company’s ability to monetize Gen AI/Agentic AI, which we continue to be skeptical of, not only for Salesforce, but even for other application vendors … Our conversations on the floor didn’t suggest a change in overall customer spending pattern, while Agentforce adoption/use cases seems limited.”
-
DA Davidson: “We came away incrementally more positive about Salesforce’s ability to monetize AI. However, we are not ready to underwrite reacceleration to a 10%+ organic growth compound annual growth rate through FY30. We continue to see Agentforce as a nascent growth component in the near term.”
“Yes, most of the deals are initial pilots or proof of concepts and the real usage/ramp in use case doesn’t appear imminent yet. Possible this changes next year but no concrete signs yet,” one Wall Street source who attended Dreamforce said of Agentforce.
Save the date for Yahoo Finance’s BIG Invest event!
I think the stock is a tough one to buy, even at a discount — until Salesforce gets its top line humming to show it’s making bank off of Agentforce and could hit its FY30 guidance. The company could also use more expense discipline.
AI is dramatically changing the future of software and how the Street views software plays. The sector has been reset from a valuation perspective, making it challenging for optimistic guidance to be achieved.
Brian Sozzi is Yahoo Finance’s Executive Editor and a member of Yahoo Finance’s editorial leadership team. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.
Click here for the latest technology news that will impact the stock market
Read the latest financial and business news from Yahoo Finance
This is The Takeaway from today’s Morning Brief, which you can sign up to receive in your inbox every morning, along with:
I knew it was going to be a spicy time at Salesforce’s (CRM) annual Dreamforce event when I left my suitcase in a JFK convenience store because I was too busy working in my head. I got the suitcase, but only after I had already walked halfway to my gate.
And spice is what I got when it was all said and done.
Ahead of the event, Salesforce co-founder and CEO Marc Benioff tossed his support behind President Trump in a New York Times interview. He said the president is doing a great job and that he would be open to the National Guard being sent to San Francisco to address ongoing crime. (Note: Benioff now mostly resides in Hawaii, where he is also registered to vote.)
The callout shocked local lawmakers and many in his influential network. Benioff — who owns Time Inc. — has sought to publicly stay out of politics, has been viewed as pro-left, and has invested huge sums of money in the city.
Although Benioff did travel with Trump and other CEOs to the UK for the state dinner with King Charles.
People I talked to were taken aback by Benioff’s National Guard comments. (But not on the president doing a great job — a lot of CEOs have been quite pleased by what he’s achieved business-wise.)
They’re not canceling their business with Salesforce or slamming AI software play Agentforce, but they’re feeling let down by a leader who has championed stakeholder capitalism, saving Earth’s natural resources, and ensuring diversity for years.
These comments hung over Dreamforce like a black cloud.
With these headlines swirling, I found it rather unfortunate that a scheduled interview I had with Benioff on Tuesday got canceled midway through the day. Efforts to make the interview happen on Wednesday were unsuccessful. I will leave it at that.
By Thursday, Benioff’s comments appeared to have cost him a longtime relationship. Venture capitalist Ron Conway reportedly slammed Benioff’s comments in an email to him. Conway had been a member of the Salesforce Foundation board for a decade.
Conway didn’t return my request for comment.
Again, lots of spice.
The company did try to bring the energy. Salesforce unveiled voice capabilities as part of Agentforce, and new deals with OpenAI (OPAI.PVT) and Anthropic (ANTH.PVT). OpenAI’s latest GPT-5 model and Anthropic’s Claude model will be embedded into Salesforce’s ecosystem. This enables employees and consumers to interact with customer data and analytics in ChatGPT, Slack, and other Salesforce software.
The company outlined revenue guidance of $60 billion-plus by the end of fiscal year 2030 — resulting from a 10%-plus organic revenue growth rate. This is bold guidance, underpinned by Salesforce’s unyielding belief in Agentforce. Note that Salesforce’s constant currency sales have grown less than 10% for the past five quarters.
And the company will miss its $50 billion fiscal year 2026 revenue target issued in 2020 and reiterated in 2021 and 2022. Its current guidance calls for fiscal year sales of $41.3 billion.
All this arrives as Salesforce sits at a crossroad.
Its stock has lost 26% this year with lukewarm earnings reports, while other tech companies participate in the AI rally. Benioff mentor Larry Ellison’s Oracle (ORCL) has seen a reversal of fortune, with the stock exploding 88%.
Salesforce stock popped 8.5% on Thursday as investors digested the fresh long-term outlook — but the shares finished the day up only 3.98%.
Growing concern on the Street centers around the pace of AI demand by corporations. There are also fears around how AI will challenge traditional software.
Why do we need software companies when ChatGPT is going to do all this stuff? That’s the current groupthink on the Street.
The worries show in Salesforce’s valuation. At a forward price-to-earnings ratio of 18.8 times, Salesforce’s stock trades at a discount to the S&P 500’s (^GSPC) multiple of 24 times. Rival Microsoft’s (MSFT) forward PE is 33 times. The aforementioned Oracle fetches 43 times.
The company tried to squash these concerns at Dreamforce by providing examples of Agentforce driving productivity for companies like PepsiCo (PEP) and Dell (DELL). The tech all works nicely.
But I didn’t get the sense that people want to hand over giant checks for Agentforce today. One top leader told me they are using Microsoft’s Copilot instead. Another didn’t know much about Agentforce yet.
And a lot of this meh-ness got picked up in the Street commentary:
-
Guggenheim: “A lot of the growth expectation hinges on the company’s ability to monetize Gen AI/Agentic AI, which we continue to be skeptical of, not only for Salesforce, but even for other application vendors … Our conversations on the floor didn’t suggest a change in overall customer spending pattern, while Agentforce adoption/use cases seems limited.”
-
DA Davidson: “We came away incrementally more positive about Salesforce’s ability to monetize AI. However, we are not ready to underwrite reacceleration to a 10%+ organic growth compound annual growth rate through FY30. We continue to see Agentforce as a nascent growth component in the near term.”
“Yes, most of the deals are initial pilots or proof of concepts and the real usage/ramp in use case doesn’t appear imminent yet. Possible this changes next year but no concrete signs yet,” one Wall Street source who attended Dreamforce said of Agentforce.
Save the date for Yahoo Finance’s BIG Invest event!
I think the stock is a tough one to buy, even at a discount — until Salesforce gets its top line humming to show it’s making bank off of Agentforce and could hit its FY30 guidance. The company could also use more expense discipline.
AI is dramatically changing the future of software and how the Street views software plays. The sector has been reset from a valuation perspective, making it challenging for optimistic guidance to be achieved.
Brian Sozzi is Yahoo Finance’s Executive Editor and a member of Yahoo Finance’s editorial leadership team. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.
Click here for the latest technology news that will impact the stock market
Read the latest financial and business news from Yahoo Finance
