Salesforce's Big Conference was a Small Success-Even as the Stock Fell

Dow Jones
4 hours ago

You wouldn't know it from the stock chart, but Salesforce's flagship three-day conference in San Francisco gave investors some positives to take away.

Salesforce stood by its long-term growth targets at the annual Dreamforce event, which began Tuesday and finishes Thursday evening. More importantly, the maker of customer-relationship-management software talked up how it can withstand the artificial-intelligence boom.

Endorsements from OpenAI CEO Sam Altman and Anthropic CEO Dario Amodei, who both spoke at the event, were the cherry on top.

"Salesforce delivered a clear message at both the Dreamforce keynote and its investor event: AI is not killing [software-as-a-service]," wrote Piper Sandler analyst Billy Fitzsimmons in a research note Thursday.

Shares didn't cooperate, slumping 2.2% to $244.54 on Thursday. That follows drops of 1.5% and 2% on Tuesday and Wednesday, respectively. A brief service outage during the event didn't help.

The bear argument around Salesforce has long been that companies will increasingly use autonomous AI agents, reducing the need to buy software "seats" for human employees. But analysts came away from the event feeling better-if not totally enthusiastic-about Salesforce's wide-ranging AI strategy.

Users accessing the Slackbot AI agent within Slack, the popular business messaging platform owned by Salesforce, surged 150% quarter over quarter. Meanwhile, nine of the top 10 AI companies run on Salesforce's platform, with average recurring revenue from this group rising 435% from last year, the company said.

Salesforce last week introduced what it calls an AI Enterprise Harness, which customers can use to monitor, control, and educate AI agents. The system should position Salesforce as a trusted layer between corporate data and AI models, said Fitzsimmons, the Piper Sandler analyst. He reiterated an Overweight rating and $280 price target on the stock.

Salesforce also stressed its growing range of pricing models based on seat numbers, platform usage, and more. In theory, this pricing flexibility can protect against any slowdown in seat growth, said Arjun Bhatia, an analyst at William Blair, which rates Salesforce stock at Outperform.

Others want to see how the pricing strategy plays out.

"While we see the enhanced flexibility as a positive, we also see this adding more complexity internally as pricing personalization adds opacity to revenue forecasts," wrote Gil Luria, an analyst at D.A. Davidson, in a research note Thursday. Luria rates Salesforce at Neutral with a $225 price target.

All things considered, Salesforce reiterated its target for 11% compounded annual revenue growth through fiscal 2030. That represents an acceleration from 9.6% growth in fiscal 2026.

Salesforce stock is still down 7.7% this year, and no one is getting out over their skis just yet. But about 20 analysts have boosted their price targets for the stock since Dreamforce began, according to FactSet. That is a solid showing at a time when software stocks face an uphill battle.

 

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