Salesforce CEO Marc Benioff on a $1 trillion opportunity and optimism for Trump 2.0
The Street has latched on to the thesis that Salesforce (CRM) will make bank off of new AI digital agents, so the tech titan is going full steam ahead on hatching them.
Only months after releasing Agentforce, Salesforce took the wraps off Agentforce 2.0 on Tuesday at an investor and customer event in San Francisco. Some of the new features include creating marketing campaigns, joining calls to provide feedback on customer interactions, and helping pursue sales leads.
Agents are also being embedded into Salesforce’s Slack communications tool, offering the ability to send a direct message to provide a summary of what’s happening with a project.
Salesforce is looking to capitalize on the momentum with agents, which puts it in direct competition with Microsoft’s Copilot software.
“Agents are a $1 trillion TAM [total addressable market opportunity],” Salesforce co-founder and CEO Marc Benioff told me.
The company closed 200 Agentforce deals in the third quarter. New users include FedEx (FDX), IBM (IBM), and Accenture (ACN). In total, Salesforce said it closed 2,000 AI-related deals in the third quarter.
Benioff told me the company has since closed another “1,000 revenue-generating deals” for Agentforce.
The Street has largely piled onto the bull narrative on Agentforce, sending the stock up more than 36% since new Agentforce solutions were introduced at Salesforce’s annual Dreamforce event in September.
“Salesforce saw strong underlying growth metrics [in the third quarter] but importantly massive demand out of the gates for Agentforce as the AI Party now comes to Salesforce and the software world,” Wedbush tech analyst Dan Ives said. “We believe the AI Revolution is entering the software phase into 2025.”
Ives rates Salesforce shares at Outperform with a price target of $425, or potential upside of 21%.
According to Yahoo Finance data, 68% of the 50 sell-side analysts that cover Salesforce rate it a Buy or Strong Buy. The average price target is $396.
But it wasn’t a perfect third quarter for Salesforce, leading some analysts to question if the stock has run too far too fast.
The company missed consensus earnings estimates due to $200 million in investment losses. Fourth quarter revenue guidance was also a shade below estimates.
Guggenheim analyst John DiFucci said “investors are too optimistic about the impact Agentforce could have,” judging by the stock’s valuation. The stock trades on a forward P/E multiple of 32 times, per Yahoo Finance data, a relative premium to AI chip darling Nvidia (NVDA) at 30 times.
