Salesforce Shines on AI and Data Cloud, Can It Silence the Skeptics?

Salesforce (CRM) shocked the market on Wednesday by not just beating expectations, but also raising its full-year sales and profit forecast, something few companies are doing in today’s tough economy. Its growing success in AI and Data Cloud shows the company is now stepping into a powerful new phase of growth.

Salesforce co-founder and CEO Marc Benioff told Yahoo Finance

“Everything went well for us this quarter. We had bookings go well, revenue went well, and currency went well,  We’re just seeing some incredible results from customers.”

Salesforce shares moved slightly into the green in pre-market trading Thursday, a reflection of cautious optimism from investors. The real headlines, however, were hidden in the details: Data Cloud and AI-related services have now crossed the $1 billion mark in annual recurring revenue, showcasing a staggering 120% year-over-year growth. Meanwhile, the company has closed over 8,000 deals for its new Agent Force technology, with half of those being paid accounts, a major validation for its product roadmap.

JP Morgan’s analyst Mark Murphy noted:

“Overall, we are pleased to see Salesforce deliver 10-11% organic constant currency current remaining performance obligation growth, per our calculations, while we do not see any meaningful deviations relative to our model in the results.”

Previous Sentiment vs. Current Outcome

Prior to this quarter, analysts were increasingly concerned about decelerating growth across Salesforce’s core segments. While the company’s foray into AI was viewed as promising, there was skepticism over whether it could offset stagnation in its established businesses, such as Sales, Service, and Marketing Clouds. The new data has changed that narrative slightly. Core segments are still slowing, but the performance of AI and Data Cloud has provided a much-needed growth offset. Yet, the jury is still out on whether this pivot is sustainable or just a short-term boost.

What Wall Street Is Saying

Guggenheim Analyst: John Difucci
Rating: Neutral (reiteration)

“Management talked about accelerating ‘growth’ so much on the call that it felt like we were in the middle of a game of ‘Where’s Waldo?’ since improving growth was left to metrics that may or may not drive the important subscription growth, and subscription growth continues to decelerate. For instance, the Platform business (where Agentforce and Data Cloud reside) did accelerate (+14% from +12% in the prior period), but growth for the Clouds that make up Salesforce’s core business all declined materially: Sales (+7% from +9%), Service (+7% from +9%), and Marketing (+4% from +8%). This yielded moderating overall constant currency subscription growth of 8.7% from 9.1% in the prior quarter and 12.8% in the year-ago period.”

KeyBanc Analyst: Jackson Ader
Rating: Overweight (reiteration)
Price Target: $440

“Most of the headline metrics were either fine or even a slight disappointment relative to our forecasts, particularly in the core, but there was a single exception in the current remaining performance obligation (cRPO). cRPO’s constant currency growth was 11%, ahead of estimates of 10%, driving current bookings growth of 16.3%, more than double our estimate. For us, coupling the better current bookings with the positive commentary on growth is enough to keep us optimistic on shares, especially at this price.”

D.A. Davidson Analyst: Gil Luria
Rating: Underperform (reiteration)
Price Target: $225 (raised from $200)
AI’s 2% does great, the other 98% decelerates. Salesforce reported better than feared results, but the FY2026 outlook adjusting for foreign exchange and the first quarter beat was lowered vs. the initial guide as growth in the core cloud segments continues to decelerate, partially offset by data cloud and AI tailwinds. cRPO growth was 1 point better than expected, however, the second quarter guide came in slightly lighter than expected with the outlook implying single digit constant currency growth which would be the first time in company history.

Stifel Analyst: Lane Parker
Rating: Buy (reiteration)
Price Target: $375
The central questions on Salesforce remain 1) When will Agentforce/Data Cloud represent a material component of the revenue composition ($1 billion annual recurring revenue vs. $39.3 billion annualized first quarter revenue), and 2) Can core Clouds continue to grow at current rates or potentially accelerate ex-AI? We believe the company’s commentary around small business/mid-market traction, multi-cloud, and industry cloud supports the idea that there’s still ample runway for this business ex-AI, and believe that the incremental interest the company is driving through its AI solutions can sustain high-single digit growth in the mid-term.

Financial Snapshot

What Lies Ahead?

Looking forward, investors are eyeing whether Salesforce can maintain momentum in its AI and Data Cloud products while also stabilizing or revitalizing its core segments. The company’s ability to scale Agentforce and cross-sell AI-enhanced services will likely define its next chapter. Our view is cautiously optimistic. Salesforce has proven its agility in adapting to industry trends and customer needs, and its heavy investment in AI is beginning to pay dividends. However, slowing growth in foundational segments is a structural concern that won’t be fixed overnight.

Investor Insight

Investors now wait for Salesforce’s next quarter to see if AI momentum can offset deceleration in legacy clouds. In conclusion, Salesforce’s latest quarter was a reminder of its innovative edge, but also a signal that this edge must sharpen further to keep pace with changing market expectations. The next few quarters will be pivotal not only in shaping investor sentiment but in defining whether Salesforce can truly transform into an AI-first enterprise platform.