By Angela Palumbo
Salesforce's earnings, due after the market closes on Wednesday, could help make investors more positive about software companies, or keep shareholders on the sidelines. It comes down to how its main AI product is selling.
Analysts surveyed by FactSet expect the company to post adjusted fourth-quarter earnings of $3.05 a share on revenue of $11.19 billion. That would be up from the earnings of $2.78 from revenue of $9.99 billion in the same period last year.
"CRM's print has the potential to set the tone for enterprise software for the coming months amidst the debates around seat deflation and AI," Piper Sandler analyst Billy Fitzsimmons wrote on Sunday. Seat deflation, a potential result of AI models performing tasks now handled by traditional software, refers to the idea that there could be fewer users of software as a service.
Salesforce stock has fallen 30% this year and 39% over the past 12 months as investors have worried about AI. The iShares Expanded Tech-Software Sector ETF has tumbled 34% from its record closing high of $117.79 on Sept. 22.
Software firms may be able to get back into Wall Street's good graces by proving they can stand up to AI competition with their own product offerings. For Salesforce, Agentforce could be the way to do that.
Most people have become familiar with AI chatbots, such as OpenAI's ChatGPT, as a way to get instant and personalized answers to questions. AI agents go one step further, using AI models to accomplish a complex series of tasks from a simple prompt without constant human oversight.
Salesforce has tackled the production of AI agents head on through its Agentforce platform, so growth in that part of the business is in focus. Last quarter, the company reported that its Agentforce platform had $540 million in annual recurring revenue, a 330% increase from the prior year.
Analysts seem optimistic. KeyBanc Capital Markets analyst Jackson Ader wrote on Monday that during conversations with Salesforce customers, he's heard that "Agentforce deals are moving from the proof of concept (POC) and trial phase into actual paying contracts."
"This signals that, while many customers are still on pilot pricing, there is significant uplift in monetization happening in Agentforce base, " Ader wrote. He rates Salesforce as Overweight but cut his price target to $300 from $400 to reflect the stock's drop.
UBS analyst Karl Keirstead has also heard positive commentary from Salesforce customers.
"Bottom line, the Agentforce feedback up-ticked and customers are uninterested in replacing Salesforce with an AI-built alternative but we did NOT pick up evidence to support a view that Salesforce's backlog or revenue growth rates are bending higher," Keirstead wrote on Feb. 16. He rates Salesforce as Neutral with a $200 price target.
Write to Angela Palumbo at angela.palumbo@dowjones.com
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February 25, 2026 03:00 ET (08:00 GMT)
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