Salesforce reported stronger-than-expected first-quarter results this week, driven by continued growth from its aggressive AI strategy. But investors still sent the company’s shares lower in after-hours trading following the announcement.
The enterprise software giant said its Agentforce AI platform now exceeds $1 billion in annual revenue. CEO Marc Benioff He described the company’s most recent quarter as evidence that Salesforce is entering a “monster year” for growth.
Despite the upbeat message, Salesforce shares fell about 2% after the earnings release as investors focused more on concerns about future growth, relaxed guidance and broader uncertainty across the software sector than on headline performance.
As sales grow, Salesforce doubles down on AI.
Salesforce reported first-quarter revenue of $11.13 billion, up 13% from a year ago and ahead of company and analyst expectations of $11.05 billion. Adjusted earnings per share were $3.88, well above expectations of $3.13, and net income increased to $2.11 billion from $1.54 billion a year earlier.
Part of this growth was fueled by Salesforce’s acquisition of Informatica. Informatica contributed approximately $444 million to quarterly revenues following completion of the transaction in late 2025. However, much of the company’s earnings commentary centered around Agentforce, which also became a cause for investor concern.
The company closed 98 deals with a net new annual contract value of more than $1 million, with half of all Agentforce and Data 360 bookings coming from existing customers. Salesforce also raised its estimate of Agentforce’s annual revenue contribution to about $1.2 billion, up from $800 million earlier this year.
Some investors worry that AI could hollow out the software-as-a-service (SaaS) business model that Salesforce helped define.
In an interview with CNBC’s Jim Cramer, Benioff slammed the negative sentiment surrounding Salesforce and the broader SaaS market. He highlighted the company’s first-ever $11 billion quarter, insisted revenue growth remained strong and dismissed concerns that AI could undermine traditional software providers.
Why Investors Are Still Low on CRM Stock
Although the headline numbers beat expectations, investors appear more concerned about Salesforce’s prospects than they have in recent quarters. The company forecast second-quarter revenue of about $11.3 billion, slightly below Wall Street expectations of $11.4 billion.
Salesforce’s full-year guidance also failed to impress investors, who are demanding stronger evidence that its AI products are actually accelerating long-term growth. The company expects fiscal 2027 revenue to be between $45.9 billion and $46.2 billion, while also lowering its cash flow growth outlook due to debt issued for an accelerated share repurchase program announced earlier this year.
The broader market environment also appears to be putting a lot of pressure on software companies. Investors are increasingly questioning whether AI tools will strengthen SaaS businesses by improving efficiencies and expanding capabilities, or will ultimately reduce reliance on certain categories of enterprise software altogether. This uncertainty has created a more challenging environment for software revenues, and could trigger a negative reaction if even solid results do not exceed future growth expectations.
Some analysts have suggested that while Salesforce’s AI momentum is clearly growing, it is not yet large enough to fundamentally reshape the company’s overall financial profile. Barclays analyst Raimo Lenschow “Agentforce’s healthy results are still not boosting its overall numbers,” it noted, reflecting widespread concerns that the company’s AI narrative may be evolving faster than its currently measurable financial impact.
AI Optimism Still High Despite Market Skepticism
Despite the earnings decline, Salesforce executives continued to signal confidence in the company’s long-term AI strategy and broad presence within enterprise software. Benioff argued that Salesforce remains one of the strongest players in its field and highlighted how Agentforce integrates across the company’s products, services and applications. He asserted that Salesforce continues its major year of growth with AI integration across its platform portfolio.
Despite the stock’s decline of about 2%, some investors argued that Salesforce’s ability to avoid a larger selloff itself was a positive sign given the ongoing pressure across software stocks. Others pointed to the growing enterprise adoption of AI capabilities and increasing integration across the Salesforce ecosystem as evidence that the company remains well-positioned as companies continue to invest in automation and AI-based productivity tools.
But the earnings reaction ultimately highlighted how differently the market currently values the leading technology companies in the AI era. Shares of Salesforce are down 33% year to date as fears surrounding a potential “SaaS apocalypse” due to AI disruption continue to weigh on investor sentiment.
Investors are no longer satisfied simply with revenue growth or stable SaaS growth. Instead, they are looking for clear signs that AI investments are translating into accelerated expansion, sustainable competitive advantage, and substantially stronger future guidance—expectations that Salesforce has only partially met for now.