Salesforce CEO vies to overcome investors’ AI skepticism while touting company’s quarterly numbers

SAN FRANCISCO (AP) — After riding the artificial intelligence craze to new heights, business software maker Salesforce has been pummeled by a wave of investor skepticism that’s intensified the pressure on its persuasive CEO Marc Benioff to reverse the tide.

Benioff, who helped spearhead the transition to cloud computing after founding Salesforce in 1999, got a chance to try to change the AI narrative late Wednesday with the release of his company’s latest quarterly results.

The key numbers covering the August-October eclipsed the analyst projections that help steer the stock market, providing Benioff with some material to support his contention that Salesforce’s big bets on AI will yield a jackpot. The San Francisco-based company earned $2.1 billion, or $2.19 per share, a 37% increase from the same time last year while revenue rose 9% to nearly $10.9 billion. Salesforce also provided an outlook for the current quarter ending in January that exceeded analysts’ predictions.

“We’re uniquely positioned for this new era,” Benioff boasted during a 25-minute address on an analyst conference call that sometimes sounded like an AI sermon that also featured comments about “wow” moments that customers experience when seeing the company’s technology.

Salesforce’s shares initially surged by more than 5% after the results came out, but backtracked to a gain of 2% following Benioff’s presentation.

It’s unclear if that modest momentum will be sustained in Thursday’s regular trading session because making more money than analysts anticipated isn’t necessarily enough to keep propelling a technology stock amid persisting doubts about whether the hundreds of billions of dollars being poured into the much-hyped technology will pay off.

Nvidia, the dominant maker of the chips needed to power AI, put a dent in the wall of worry a couple weeks ago with a quarterly earnings report that soared far beyond analyst estimates and initially eased fears about a Big Tech bubble bursting.

But the tranquility quickly evaporated, leaving Nvidia’s stock price slightly below where it was trading before the company’s stellar earnings report and 15% below its peak price reached in late October when the chipmaker became the first company to be valued at $5 trillion.

The AI jitters have punished Salesforce even more severely. Before the earnings report was released, Salesforce’s market value had plunged by 35%, wiping out about $125 billion in shareholder wealth, since Salesforce’s stock price peaked at $369 a year ago.

The downturn has happened even as Benioff has been doing his best to highlight AI’s potential benefits while calling upon the flair for salesmanship that he developed while become the become a chief evangelist behind the rise of software subscription services amid the ruins of the dot-com bust a quarter century ago.

Benioff, who owns Time magazine in addition to his Salesforce job, also is among the Big Tech leaders who have forged ties with President Donald Trump this year while trying to persuade the administration to adopt AI-friendly policies to protect U.S. interests as China also works feverishly on the technology.

Salesforce has been primarily focused on creating Ai agents that can automate more customer sales agents while spawning a digital labor force that will take over jobs that have traditionally been filled by people.

In a sign that Benioff intends to practice what he preaches, Salesforce laid off 4,000 of its own customer support workers as its “Agentforce” technology took over more of the responsibilities.

But the corporate customers that buy Salesforce’s services haven’t been embracing AI agents as quickly as investors initially thought, turning the company into a “poster child” for the doubts hanging over the technology, said Jay Woods, chief market strategist for investment banking firm Freedom Capital Markets.

The second-guessing hasn’t dimmed Benioff’s AI exuberance – a passion that recently displayed in a resounding endorsement of Google’s latest version of the Gemini technology powering its AI suite.

“We all know that the speed of innovation has exceeded the speed of customer adoption,” Benioff conceded while confidently predicting that dynamic is about to change dramatically as more companies and government agencies build AI services into their operations.

Salesforce is projecting $60 billion in revenue for its fiscal year ending in January 2030 – a target that would require average annual increases of 10% from its forecasted sales of $41.5 billion for its current fiscal year. The company also just completed an $8 billion acquisition of another software maker, Informatica, that is building AI tools to manage corporate data.

“We’re continuing to execute on the path to our $60 billion dream” Benioff said.