TLDR
- Salesforce reports Q1 earnings Wednesday after market close; analysts expect EPS of $3.13, up 21.3% year-over-year
- Revenue is forecast at $11.1 billion, representing 12% annual growth
- CRM stock is down 34% over the past year, even as the S&P 500 gained 29%
- Agentforce, Salesforce’s AI agent product, has grown to $800 million in annual recurring revenue
- AI disruption fears around user-based pricing remain the key overhang on the stock
Salesforce reports first-quarter fiscal 2026 earnings on Wednesday afternoon, and the stakes are high.
CRM stock has fallen 34% over the past year while the S&P 500 climbed 29%. That’s a brutal gap, and investors want answers.
The stock was trading around the levels implied by a $146.5 billion market cap heading into the print.
Wall Street is looking for adjusted EPS of $3.13, up from $2.58 a year ago. Revenue is expected to come in at $11.1 billion, up about 12%.
Those numbers look solid on the surface. But the market’s concern runs deeper than one quarter.
Salesforce grew revenue at over 24% annually from 2002 to 2022. Then it hit saturation in its core CRM market, and growth slowed. Last year, revenue grew just 10%.
The company responded by improving profitability. Operating margin expanded from 2% in 2022 to 21% last year. That’s a real shift.
The AI Pricing Problem
The bigger worry is what AI does to the business model. Salesforce’s core software runs on a per-user pricing structure that carries a 75% gross margin. That model could come under pressure as AI agents replace human users on corporate networks.
Palantir said during its most recent earnings call that it had replaced its own CRM software with a custom-built solution. That’s one data point, but it’s the kind of thing that spooks investors.
The bear case is that coding agents could allow customers to build their own versions of Salesforce’s software, cutting out the vendor entirely. Salesforce is not sitting still on this.
Agentforce Starts to Gain Ground
The company has been pushing its own AI agent product, Agentforce, as an answer to the disruption threat. Agentforce uses consumption-based pricing rather than per-user fees.
At the end of Q4, Salesforce reported $800 million in Agentforce annual recurring revenue. That was up from $440 million just nine months earlier.
To put that in context, Salesforce is expected to generate around $46 billion in total revenue in fiscal 2027. So Agentforce is still a small piece of the pie.
But the growth rate is fast, and investors will be watching Wednesday’s call for updated figures.
Insider activity has also been mildly encouraging. Two insiders purchased a combined 5,141 shares in the past three months, a small but positive signal.
Salesforce’s GF Score sits at 82 out of 100, with a 9/10 profitability rating and a 10/10 growth score. Its P/E ratio stands at 22.93x.
The Q1 earnings call Wednesday afternoon will be the first real test of whether Agentforce momentum is strong enough to shift the conversation on the stock.
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