Back in the day, everybody was dying to get into Studio 54.
The legendary '70s nightclub was known the world over for its strict admission policy, with co-owner Steve Rubell once bragging to New York Magazine that "I turned away 1,400 people last Saturday."
Related: Analysts update Salesforce stock price target ahead of earnings
Well, disco may be dead, but the AI Revolutionary Party, as one analyst calls it, is just getting underway and Salesforce ( CRM ) is hitting the dance floor.
The provider of customer-relations-management software posted fiscal-third-quarter results on Dec. 3, and while it came up short of Wall Street's earnings forecasts, it beat estimates of revenue and guidance.
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"While the quarter numbers are fantastic, the real excitement is really what is hitting with the technology," Marc Benioff, co-founder, chairman and CEO, told analysts during the earnings call . "This is about so much more than another great quarter. We're really at the edge of a revolutionary transformation."
"This is really the rise of digital labor," he added.
Salesforce CEO lauds digital agents
Benioff is a big proponent of AI agents â autonomous intelligent systems that can perform specific tasks without human intervention â and he touted the San Francisco company's Agentforce platform, which he said went into production in the last week of the quarter.
"This is fundamentally reshaping how businesses operate," he said. "It's fundamentally reshaping how we operate our business and how we think about the industry itself and how you're thinking about the industry, how we're thinking about Salesforce."
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âAgentforce represents this next evolution of Salesforce,â he said. âSalesforce is a platform where AI agents work alongside humans in a digital workforce that amplifies and augments human capabilities and delivers with unrivaled speed.â
Benioff called this the beginning of âa complete digital transformation for the world.
"On top of this agentic layer," he said, "we'll soon see a robotic layer as well where these agents will manifest into robots. And how all of this is going to change society is only visible today in the movies or in our imaginations, but we can see it unfolding right here through this company."
For the quarter, Salesforce, which also owns the messaging app Slack, earned an adjusted $2.41 a share, up from $2.11 per share a year earlier but short of the consensus forecast of $2.44.
Revenue totaled $9.44 billion, up 8% from a year earlier and beating Wall Streetâs call for $9.34 billion in sales.
Salesforce is expecting fourth-quarter sales of between $9.9 billion and $10.1 billion, while analysts are looking for $10.05 billion in revenue.
The company's shares were up 37% year-to-date at last check.
Wedbush weighs in on CRM
A team of Wedbush analysts led by Dan Ives were impressed with the quarterly results.
"We believe the AI revolution is entering the software phrase into 2025, and CRM and Benioff have now been let through the velvet ropes onto the dance floor for the AI Revolutionary Party at 10 p.m., which goes until 4 a.m.," he said in a research note.
Wedbush, which has an outperform rating on Salesforce, boosted its price target to $425 from $375 âas the AI monetization phase will catalyze CRMâs growth over the next 12 to 18 months."
"Benioff said demand out of the gates for [Agentforce is] off the charts and [a] use positive sign for the growth ahead," Ives said. "Management highlighted that this quarter represents the model for all future transactions looking to the future."
Veteran trader calls results unspectacular
And Roth MKM analyst Richard Baldry raised the firm's price target on Salesforce to $395 from $335 and affirmed a buy rating on the shares, according to The Fly.
The company's revenue growth has been weak for two years, necessitating cost cuts and controls that were much at odds with its employee-coddling culture, Baldry said. But while its growth remains weak, its stock has rallied to highs on record earnings, he said.
For Salesforce to rally further, growth needs to improve, and the company may have found a catalyst in its AI-driven Agentforce offerings, which give clients a path to automate many labor-intensive operations, the analyst added.
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Loop Capital raised the investment firm's price target on Salesforce to $360 from $340 but maintained a hold rating on the shares.
The firm cited Salesforce's current remaining performance obligations, a metric software-as-a-service companies us to reflect the revenue value of contracts that they expect to recognize within the next 12 months.
The company posted another "lackluster but steady" growth in CRPO at about 10% year-over-year in constant currency, and it guided fourth-quarter CRPO growth at 9% from a year earlier, Loop said.
The firm added that the stock is no longer about its current business but about Agentforce's potential.
Salesforce did not provide any financial details regarding the adoption of Agentforce and when it can help accelerate the company's overall CRPO growth well above the current 10% range, Loop said. It did cite, however, several data points that suggest that the early feedback has been positive.
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TheStreet Pro's Stephen Guilfoyle was not terribly impressed with Salesforce's results, which he described as "solid, but unspectacular."
"There was hardly any contribution to that quarter, at least on the revenue or back-order sides, from the firm's latest AI offering, Agentforce," he said. "Yet that product is what had traders and investors falling over themselves trying to buy the stock overnight."
Guilfoyle, who is known as Sarge and whose career goes back to the floor of the New York Stock Exchange in the 1980s, said the company's balance sheet is in great shape, and so are cash flows. But.
"Operating margins are improving. I'll give Benioff that, but I have a question," he said. "If Agentforce is kicking so much tail and the quarter is off to a great start, then how come the current-quarter guidance is below consensus view?"
"Maybe I'm crazy, but shouldn't a great start for the firm's latest and greatest offering be a big enough deal to boost guidance?" Guilfoyle asked.
"I would definitely keep my powder dry if I were tempted to chase Wednesday's rally in the shares of Salesforce."
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