Salesforce Stock Sinks Despite Strong AI Momentum -- Is Now the Time to Buy the Dip?
Salesforce (NYSE: CRM) turned in solid fiscal 2026 first-quarter results and raised its full-year revenue forecast as customers begin to embrace its artificial intelligence (AI) agents. However, the stock has struggled to gain traction in 2025 with shares down more than 20% year to date, as of this writing.
With the software-as-as-service (SaaS) company also recently announcing the $8 billion acquisition of Informatica (NYSE: INFA), let's take a closer look at its results to see if the stock can start to gain some momentum.
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Agentic AI and Data Cloud see momentum
Salesforce continues to see early success with AI agents, and the company now has more than 4,000 paid customers for its Agentforce platform. Agentforce has already reached annual recurring revenue (ARR) of $100 million, the fastest product in the company's history to accomplish this milestone. In addition, 30% of Agentforce's bookings came from customers increasing their consumption, even though the product has only been available for two quarters. Including pilots, it now has more than 8,000 Agentforce deals in place.
At the same time, management said its Data Cloud offering, which helps customers unify their data into a single source, has also taken off with Data Cloud ARR increasing 120% year over year to more than $1 billion. The product recently surpassed 22 trillion records, up 175% year over year. Nearly 60% of its top 100 deals included both Data Cloud and AI, and half of Data Cloud's Q1 new bookings came from existing customers.
Agentforce and Data Cloud are part of Salesforce's four-pillar ADAM framework: agents, data, apps, and metadata. The company says that to truly deliver digital labor, these parts must all work together. That's why Salesforce apps like Tableau and Slack are deeply integrated with agentic layers while running on its metadata platform. With this, the company plans to help lead the digital labor revolution.
To help drive adoption, the company has also introduced FlexCredits, a new Agentforce consumption-based pricing model to improve customer satisfaction and enhance flexibility.
Image source: Getty Images.
For the quarter ended April 30, Salesforce's revenue increased 8% year over year to $9.83 billion, surpassing its guidance range of $9.71 billion to $9.76 billion. Subscription and support revenue also increased 8% to $9.30 billion.
Among its core products, Mulesoft revenue rose 8%, while Slack revenue jumped 11%. Tableau's growth saw strong quarter-on-quarter acceleration from 3% to 12%.
Adjusted earnings per share (EPS) rose 6% to $2.58. The company also generated $6.30 billion in free cash flow during the quarter.
Salesforce's current remaining performance obligations (cRPOs) increased 12% year over year to $29.6 billion. cRPOs are the portion of a company's contracted revenue that's expected to be recognized within the next year. The metric is commonly used by SaaS companies to provide visibility into future revenue.
The company boosted its full-year outlook as you can see below:
| Metric | Prior Fiscal 2026 Guidance | New Fiscal 2026 Guidance |
|---|---|---|
| Revenue | $40.5 billion to $40.9 billion | $41.0 billion to $41.3 billion |
| Revenue growth |
7% to 8%
|
8% to 9%
|
| Adjusted EPS | $11.09 to $11.17 | $11.27 to $11.33 |
Data source: Salesforce.
Time to buy the dip?
It's been a theme recently to see enterprise software companies take a cautious stance with guidance given the uncertainty around tariffs and the impact they may have on the economy. However, Salesforce increased its full-year forecast, and it still wasn't enough to lift its struggling stock
That said, the company is seeing early momentum with agentic AI, and its vision to create a unified platform around its ADAM framework looks like a solid plan. Meanwhile, its acquisition of data integration company Informatica should bolster its Data Cloud offering and boost AI agent performance. Plus, with FlexCredits, the company is better able to align the cost of its product with the utility customers get from it, which should help drive adoption.
Salesforce looks attractively priced by any metric. It has a forward price-to-sales multiple of 6 based on analysts' estimates for fiscal 2026, while its forward price-to-earnings (P/E) ratio is 23, and its price/earnings-to-growth (PEG) ratio is 0.3. A PEG ratio below 1 is typically reflective of an undervalued stock.
Data by YCharts.
When you combine Salesforce's valuation metrics with its AI market opportunity, you get a compelling case to buy this stock on the dip.
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Geoffrey Seiler has positions in Salesforce. The Motley Fool has positions in and recommends Salesforce. The Motley Fool has a disclosure policy.
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