Salesforce shares jumped 22.6% on Aug. 27 after the company posted fiscal second-quarter results and raised its full-year guidance, powered by its Agentforce AI platform, Data 360, and Slack. The stock is still down year to date, and its valuation remains modest even after the rebound.
Salesforce (NYSE: CRM) shares surged 22.6% on Aug. 27 after the company reported solid fiscal second-quarter results and issued upbeat guidance. The rally came on strong momentum from its agentic AI platform Agentforce, its Data 360 product, and Slack.
The stock is still down for the year, however, and the results are starting to dispel the narrative that AI will displace the software layer.
Agentforce and Data 360 keep accelerating
Agentforce's annual recurring revenue (ARR) surged more than 240% to $1.5 billion. Slack's Slackbot became the company's fastest-adopted AI product, posting 150% sequential growth to 1 million active users just five months after launch.
Salesforce said nine of the ten largest AI companies use Salesforce and Slack, and their spending increased 435% year over year. The company also introduced Claudeforce, a plug-in with pre-built sales skills built on Anthropic's Claude reasoning and agentic tool use.
Data 360, formerly Data Cloud, saw its ARR triple to $2.4 billion. Informatica added $1.1 billion in ARR, suggesting organic growth of over 60%. Combined, Agentforce and Data 360 ARR climbed 210% year over year to $3.9 billion.
Revenue and earnings beat estimates
Total revenue rose 11% year over year to $11.35 billion, at the high end of the company's $11.27 billion to $11.35 billion guidance range and above the $11.32 billion consensus compiled by LSEG. Subscription and support revenue increased 12% to $10.82 billion, and revenue from the Agentforce 360 and Slack platform surged 43%.
Adjusted earnings per share skyrocketed 103% to $5.90, though that figure included a $2.6 billion gain on strategic investments, largely from Salesforce's stake in Anthropic. Excluding that gain, adjusted EPS would have been around $3.43, still above the $3.27 consensus.
Salesforce raised its full-year guidance again, now projecting fiscal 2026 revenue of $46.1 billion to $46.4 billion, 11% to 12% growth, and adjusted EPS of $16.67 to $16.71. For fiscal Q3, the company forecast revenue growth of 11% to 12% to between $11.42 billion and $11.5 billion, with adjusted EPS of $3.42 to $3.44 — above the $3.38 analysts had expected on revenue of $11.41 billion.
Valuation still looks reasonable
Even after the rebound, the stock trades at a forward price-to-sales multiple of 4 and a forward price-to-earnings ratio of 16, based on fiscal 2027 analyst estimates. For a company with low-double-digit revenue growth and building momentum in Agentforce, that leaves the stock looking reasonably priced relative to its growth.
Source: The Motley Fool
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