Salesforce investors hope for the fastest growth, progress in profits

There was MomentDuring the growth days that the epidemic fed from 2020, Matthew Salesforce They exceeded Oracle By the maximum market. Mark Beniof He finally overthrew his teacher, Larry Ellson.

That moment has been given a long time ago.

The price of Salesforce decreased by 25 % this year, which is the worst performance in large technology and the second in the decline in DOW, only overcome United. Meanwhile, Oracle jumped by 34 %, most of its peers excelled and outperformed the main indexes.

The two companies, which were rotating even by evaluation, are now about $ 400 billion. The value of Oracle is 630 billion dollars, and Salesforce has decreased to 239 billion dollars. Ellison is now ranked second behind Elon Musk on Bloomberg billionaires indexWith a net $ 278 billion. Benioff is 318th with $ 10.4 billion.

Investors are eager to hear how Benioff plans to correct the ship when Salesforce reports on quarterly results after closing on Wednesday.

Sales growth in individual numbers have been immersed for four consecutive quarters, as the company calculates saturation challenges in the main market for customer relationship management programs. This series is expected to continue, as analysts estimate revenue growth by 8.7 % to $ 10.1 billion, according to LSEG.

during April periodAbout a quarter of sales of Salesforce 9.3 billion dollars as subscriptions and support came from customer service products, and its largest category. The company charges the service cloud based on the number of agents who use the program.

With the rapid height of artificial intelligence, some analysts expect more inquiries through automation, which poses a risk on the salesforce.

Benioff is well aware of the challenge. he He said in June Artificial intelligence actually deals with about 30 % to 50 % of the company’s business. It is a great cause of the salesforce It is said 1000 jobs were reduced earlier this year.

When it comes to customers, Salesforce now sells Agentforce, an Amnesty International system to answer customer support requests. After it became available in October, Agentforce was $ 100 million of annual revenue, Benioff told analysts in a phone call in May.

“It is not important to transfer the needle to this work, given the scope,” said Michael Torin, Wales Vargo analyst who has a recommendation in the Slesforce arrow.

Turin said that the hope is for customers to end up paying more opposite Fores agent than the service cloud.

The big difference for Oracle is that it is one of the first beneficiaries of artificial intelligence. In the first place, it is known for its database program, which sits within large companies and government agencies, Oracle has obtained the cloud Infrastructure obligations From Openai and Musk’s Xai.

Agentforce can be a salesforce window in AI’s business, if it is gaining strength.

“I think there was a lot of frustration with the performance of the Salesforce participation, so I think we are at a stage that investors are trying to know if there is an opportunity to recover here,” Torin said.

Expansion can come from the outside. In May, Salesforce agreed to buy a data management company Informatica to 8 billion dollars. This is largely the largest sales deal since 27.1 billion dollars Slack purchased in 2021. Meanwhile, Salesforce has not spent more than $ 2.5 billion on integration and purchases, a major growth engine in the past years.

In late 2022, active investors began to follow Salesforce, not satisfied with high -cost acquisitions from Benioff, the share of the weak company and its increasing working power. Activists began inciting a more favorable mix of sales and profit, and Salesforce responded by expanding the margins sooner than planned.

One of the main instigators, the value of the meme, returned to more. In the second quarter, the company first Bought salesforce In 2022, his detention was reinforced by 47 %, according to L. presentation. In October 2024, Jeff Smith praised the meal for profitability improvements in Salesforce “There is a lot to go.”

Vulcan Value Partners is a comfortable salesforce shareholder for software plans. After obtaining a stake in 2020, Volcan added 345,000 shares in the second quarter, which increased its total property to $ 300 million.

“The thing we focus on is the value of the share for each share,” said Stephen Simmons, a company portfolio manager. “This continues to grow. Nothing we see says that this company will go anytime soon.”

Analysts expect the stock profits to rise to $ 2.78 to the last quarter, up from $ 2.56 in the previous year, according to LSEG.

Volcan sold Oracle shares in 2020, and was lost in a sharp march, followed. Simons said he would buy again if the arrow becomes reduced.

“It is funny how things go around and roam,” said Simons. “Benioff Salesforce begins as a cloud institutional company, and Larry’s in Oracle is trying to transfer his clients in the cloud.”

Correction: In the previous days, Larry Ellson directed Mark Benf. A previous version of this article has offended its professional relationship.