Shares of Salesforce (CRM) gained 2% ahead of the company’s first-quarter earnings report on Wednesday afternoon.
Investors are looking for signs that the software giant can stabilize growth and address mounting concerns over how artificial intelligence could reshape the enterprise software industry.
The stock has fallen roughly 34% over the past year even as the broader S&P 500 gained about 29%, reflecting growing investor skepticism toward traditional software business models facing disruption from AI-powered tools and automation.
Wall Street expects Salesforce to report adjusted earnings per share of approximately $3.11 to $3.13 for the quarter, up from $2.58 a year earlier.
Revenue is projected at roughly $11.05 billion to $11.1 billion, representing about 12% year-over-year growth.
Options traders are also bracing for volatility.
According to recent options pricing cited by Investopedia, Salesforce shares are expected to move roughly 8% in either direction following the results.
AI disruption concerns weigh on software sector
Investor concerns surrounding Salesforce have intensified as AI-powered software agents increasingly threaten traditional user-based pricing models that have long driven profitability across the software industry.
Salesforce built much of its business around customer relationship management software sold on a per-user basis, a model analysts note carries gross margins of roughly 75%.
However, the rapid rise of AI agents capable of automating workflows and generating custom software solutions has raised concerns that companies could rely less on traditional enterprise software subscriptions over time.
The issue gained additional attention earlier this month after Palantir Technologies said during its earnings call that it had replaced its own customer relationship management software with a custom-built solution.
Bank of America analysts recently relaunched coverage of Salesforce with an Underweight rating and a $160 price target.
The brokerage wrote that it expects “a structural reset driven by AI transition,” which could involve slower customer growth, limited upselling opportunities, and an “underwhelming” path toward monetizing AI offerings.
Agentforce becomes central to Salesforce strategy
Salesforce has been attempting to counter those concerns by expanding its own AI platform under the Agentforce brand.
Unlike Salesforce’s traditional per-user pricing model, Agentforce charges customers based on service consumption.
The company has already adjusted Agentforce pricing several times as it searches for a sustainable monetization strategy.
Despite broader concerns, Salesforce has shown early signs of traction in AI-related products.
At the end of the fourth quarter, the company reported approximately $800 million in annual recurring revenue tied to Agentforce and related offerings, up from $440 million nine months earlier.
While still relatively small compared with Salesforce’s expected fiscal 2027 revenue of roughly $46 billion, investors are closely watching whether the company can accelerate the adoption of its AI services.
Analysts divided ahead of earnings report
Analyst sentiment on Salesforce remains mixed despite the stock’s recent weakness.
Deutsche Bank maintained a Buy rating with a $255 price target and said concerns about AI disruption may underestimate how software companies can adapt over time.
The bank forecast a “seasonally slow but steady start” to the year and argued that AI concerns “underappreciate the opportunity for software companies to adapt to new paradigms, in addition to the timeline over which any disruption might occur.”
According to Visible Alpha data, 14 out of 20 analysts currently rate Salesforce shares as a Buy, while five maintain neutral ratings and one recommends Sell.
The average analyst price target of $262 implies substantial upside from current levels if Salesforce can convince investors that its AI transition strategy is gaining traction.
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