Salesforce stock jumped Wednesday after the company reported earnings, with investors cheering third-quarter results and the promise of new artificial intelligence tools.
The software giant's stock surged more than 9% to trade at $363.42 per share after reporting earnings after the closing bell on Tuesday.
The company reported 8% annual revenue growth, coming in at $9.44 billion compared to analyst expectations of $9.34 billion. Net income, meanwhile, totaled $1.5 billion for the quarter, a 25% increase from the company's $1.2 billion in net income at the same time a year ago.
Salesforce also gave better-than-expected fourth-quarter guidance, projecting fiscal sales between $9.9 billion and $10.10 billion compared to analyst expectations of $10.05 billion.
CEO Marc Benioff attributed the strong quarterly performance to Agentforce , its AI-powered chatbots that have attracted close attention from analysts.
"We delivered another quarter of exceptional financial performance across revenue, margin, cash flow, and cRPO," Benioff said in a statement. "Agentforce, our complete AI system for enterprises built into the Salesforce Platform, is at the heart of a groundbreaking transformation."
The tool lets Salesforce users build customized AI agents that can interact directly with customers in a more advanced way than traditional AI chatbots, and which can be used in tandem with other Salesforce products, like its customer-relationship-management software.
"The rise of autonomous AI agents is revolutionizing global labor, reshaping how industries operate and scale. With Agentforce, we're not just witnessing the future—we're leading it, unleashing a new era of digital labor for every business and every industry," Benioff said.
Several Wall Street analysts raised their price targets for the stock following the call, pointing to the success of Agentforce.
Analysts at Wedbush Securities, led by Dan Ives, upped their target from $375 to $425. The analysts say they see strong AI growth ahead for the company after solid demand for Agentforce in its early stages.
"We believe the AI Revolution is entering the software phase into 2025 and CRM and Benioff have now been let through the velvet ropes onto the dance floor for the AI Revolution Party," they said in a Wednesday note.
Analysts at RBC Capital Markets also raised their price target on the stock, from $300 to $420.
They warned, though, that despite encouraging commentary on Agentforce, related revenue will take some time to actually materialize.
"We remain skeptical about the impact to subscription growth in the medium term, potentially creating a mismatch with high investor expectations," the analysts said in a Wednesday note.
Analysts at UBS, meanwhile, say they expected the excitement around Agentforce, but were impressed with the optimistic tone of the earnings call in general. That tone could spell improved spending trends for the industry, they say.
"What stood out to us was the tone uptick in terms of the underlying demand trends, a subtle shift in tone," the analysts said, adding that it mirrors similar comments from providers like ServiceNow, Datadog, and Snowflake.
"This is interesting and we think supports a view that overall software spending trends may finally be perking up," they added.
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