Salesforce shares surged nearly 23% after strong earnings and an Anthropic partnership.
This signals investors are less worried about AI replacing traditional software.
The company's AI products saw annualized revenue top $1.5 billion.
What happened
Salesforce shares jumped almost 23% on Thursday, their best day since 2020, after the company reported a beat-and-raise quarter and announced a new partnership with Anthropic called "Claudeforce." The rally erased most of the stock's loss for the year, though it's still down about 5%.
Why it matters
The surge marks a shift in investor sentiment, as concerns about AI disrupting traditional software had caused Salesforce's stock to slump 21% last year. The company's Agentforce AI products saw annualized revenue soar 240% to more than $1.5 billion, easing fears and leading some analysts to see renewed growth opportunities.
What to watch
Benioff said frontier models depend on CRM, not replace it, and the Anthropic partnership includes a plug-in with 37 prebuilt sales skills. Analysts on average expect growth of 11% this fiscal year, while one analyst sees potential for 15% growth.
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The surge in Salesforce's stock reflects a broader reassessment of AI's threat to traditional software. For months, investors worried that AI models could replace CRM systems, but Benioff's message—that frontier models depend on CRM—seems to be gaining traction. The company's earnings beat and the Anthropic partnership, which includes a plug-in with 37 prebuilt sales skills, signal that AI and CRM are complementary, not adversarial.
Benioff's strategy also includes bringing back former employees who left for OpenAI. Reports of 22 former Salesforce employees in talks to return, along with the returns of Kaylin Voss and Peter Doolan, highlight a "boomerang" culture. This may help Salesforce retain talent and knowledge, countering the narrative that AI startups are draining its workforce.
Looking ahead, the real test is whether Salesforce can sustain growth above 10% and expand margins. While some analysts see potential for 15% growth, others expect a dip to 10% in the coming years. The Anthropic partnership and AI-driven products like Agentforce will be key to proving that Salesforce remains essential in an AI-driven enterprise landscape.
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