Salesforce Crushed Earnings by 25%. The Stock Is Still Down 28% This Year. What’s Going On?
Salesforce reported Q4 results Wednesday after the close that beat estimates on almost every metric. Non-GAAP EPS of $3.81 crushed the $3.05 consensus by 25%. Revenue of $11.2 billion grew 12% year over year. The company announced a $50 billion share buyback, raised its quarterly dividend, and lifted its FY2030 revenue target to $63 billion. And yet, Salesforce shares are still down roughly 28% in 2026.
Why the beat didn’t fully land
The issue is what comes next. FY2027 revenue guidance of $45.8 billion to $46.2 billion implies 10–11% growth, which is solid, but management acknowledged that organic revenue reacceleration won’t kick in until the second half of the fiscal year. In a market that has been pricing in existential risk to the entire software sector, “growth picks up later” isn’t the reassurance investors were looking for. The stock initially fell about 5% in Wednesday’s after-hours session before recovering to close up roughly 3.4% on Thursday.
The AI angle
Salesforce’s Agentforce platform, its AI-powered tool for automating enterprise workflows, was the standout. Agentforce ARR hit $800 million, up 169% year over year, with 29,000 deals closed in the quarter, up 50% from the prior quarter. CEO Marc Benioff described the company as “the operating system for the Agentic Enterprise,” bringing humans and AI agents together on one platform. The company also benefited from its stake in Anthropic, which generated an $811 million investment gain in the quarter.
Why this matters beyond Salesforce
Salesforce’s results are a clear test case for the question hanging over the entire software sector: is AI a growth engine or an existential threat? The answer from this quarter is “both, and it’s complicated.” The business is growing, AI is driving new revenue, and customers are buying. But the market remains skeptical, and the software selloff that has wiped out 10%+ from the iShares Expanded Tech-Software Sector ETF (IGV) in February alone isn’t over. Nvidia CEO Jensen Huang weighed in Thursday, telling CNBC that markets “got it wrong” on AI’s threat to software. Whether he’s right will become clearer as more enterprise software companies report over the next few weeks.
Sources: CNBC, Bloomberg, Salesforce, Yahoo Finance