Salesforce Stock May Pop With Share Of $31 Billion AI Agent Market

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Generative AI is moving beyond AI chatbots to agentic AI — capable of performing tasks ranging from “checking a car rental reservation at the airport to screening potential sales leads,” reported the Wall Street Journal.

This does not surprise me. In Brain Rush, I speculated on the future of AI — including the emergence of autonomous agents. Such agents would plan and execute tasks, such as designing and delivering a marketing campaign that would iteratively query large language models to sense and respond to external feedback.

Agentic AI — a global market expected to end 2024 with $31 billion in revenue and to grow thereafter at a 32% annual rate for the next few years, according to Emergen Research — could revive enterprise software as a service providers such as Salesforce.

Agentic AI could also help propel Salesforce stock — which has risen 13% in 2024 — to a record high. Here are three reasons Salesforce’s agentic AI service — Agentforce — could boost the company’s revenue growth:

• Agentforce helps customers boost productivity.
• The service’s value-based pricing model may encourage customers to try the product.
• Salesforce may be able to fend off new competition from Microsoft.

Salesforce’s Single-Digit Growth And Modest Stock Price Performance

Salesforce’s most recent earnings report featured expectations-beating revenue growth and a slightly disappointing revenue forecast for the current quarter. Here are the key numbers:

• Fiscal year 2025 Q2 revenue: $9.33 billion — up 8.4% from the year before and $100 million more than expected, according to the London Stock Exchange Group consensus.
• Fiscal year 2025 Q2 adjusted earnings: $2.56 per share — up 14.8% and 20 cents higher than expected, according to the LSEG estimate.
• Fiscal year 2025 Q2 net income: $1.43 billion — up 12.8% from the year before, noted CNBC.
• Fiscal year 2025 Q3 revenue forecast: $9.335 billion in the middle of the range — $50 million short of the LSEG consensus.
• Fiscal year 2025 revenue forecast: $37.85 billion — up 8.5% and slightly ahead of the LSEG forecast.

Salesforce increased its adjusted operating margin guidance for the full year to 32.8% — 0.2 percentage points higher than the May 2024 guidance.

Company executives previously “pointed to longer sales cycles and scrutiny of budgets,” CNBC reported. “We are assuming that the conditions we’ve been experiencing over the past few years persist,” CFO Amy Weaver told investors in the conference call.

How Agentforce Pays Off For Enterprise Customers

Salesforce introduced Agentforce this summer — claiming the service can outperform chatbots when it comes to automating activities such as “customer service, marketing campaigns and business procurement,” the Journal noted. Agentforce can prequalify business leads, contact a promising prospect and “set up a meeting on behalf of a human salesperson,” according to Salesforce.

As I noted in my Value Pyramid case study, most generative AI use cases help people overcome creator’s block — such as the anxiety about writing an email. Fewer generative AI applications help improve the productivity of business functions such as customer service or coding. And few, if any, applications of AI chatbots enable companies to add new sources of revenue.

One client is clearly using Agentforce to boost the productivity of customer service. BACA Systems, an Orion Township, Mich.-based machine manufacturer, uses Agentforce to “handle a growing volume of service calls without adding additional human staff,” said Andrew Russo, enterprise architect at BACA, in an interview with the Journal.

Another company using Agentforce to boost customer service productivity is Wiley, the educational publishing giant. Wiley enjoyed “a more than 40% autonomous resolution rate for customer inquiries during its busy back-to-school season,” reported VentureBeat.

Salesforce is very optimistic about customer adoption of this service. “Agentforce will be the number one supplier,” said Salesforce CEO Marc Benioff in an interview featured by Fast Company.

“I think we’ll have more than a billion agents running from Salesforce within the next 12 months. Even at Dreamforce, I got 10,000 customers hands-on with Agentforce,” Benioff added.

Agentforce’s Customer-Friendly Pricing Model

SaaS providers typically require customers to pay a fee based on the number of employees with access to the technology. This model has annoyed customers of Microsoft’s Copilot chatbot — limiting their adoption of the technology because the software giant charges an extra $30 per user per month, which some companies view as too much, according to Brain Rush.

Instead of this approach — which the Journal likened to “leaving a faucet sink running” — Salesforce charges only when customers use Agentforce. Specifically, users pay $2 per conversation or sales lead, reported the Journal.

This pricing model aligns Salesforce’s interests with those of its customers by providing the company an incentive for Agentforce to deliver “clear and concrete value,” noted the Journal. Since agents do work that is not necessarily tied to an “individual human employee,” this pricing model makes sense Adam Evans, senior vice president of Salesforce, told the Journal.

How Salesforce Could Fend Off A Challenge From Microsoft

Salesforce said Agentforce is far more valuable to customers than Copilot. “This is not copilots,” CEO Marc Benioff told investors in an August 28 investor conference call, according to CNBC.

“So many customers are so disappointed in what they bought from Microsoft, and copilots, because they aren’t getting the accuracy and the responses they want. Microsoft has disappointed so many customers with AI. Listen. These agents are autonomous, able to act with accuracy, come right out of the box, able to go right out of the platform,” added Benioff.

Microsoft begged to differ with Benioff. “Every customer is at a different place in their journey, but overall we are hearing something quite different from our Copilot for Microsoft 365 customers,” Jared Spataro, Microsoft corporate vice president, told CNBC.

“Last quarter alone, we saw a customer increase of over 60%, and daily users have more than doubled – a clear indicator of Copilot’s value in the market. When I talk to CIOs directly and if you look at recent third-party data, organizations are betting on Microsoft for their AI transformation,” Spataro added.

Microsoft announced plans toroll out of its own AI agents in November. The software giant demonstrated an AI agent for McKinsey that the consulting giant said could reduce its lead time by as much as 90%, CNBC reported.

Here’s how Microsoft said such results could be achieved. A customer service agent would collect contextual data on a customer order and compare the issues with other common product problems. After that, the AI sends a follow-up email. “We’re excited about this because of the business value it can drive,” Spataro told CNBC.

There are many challenges ahead for agentic AI. If the technology enables companies to do more with less without hallucinations and inaccuracies, Agentforce could boost Salesforce’s top line and stock price considerably.

If Microsoft’s AI agents accomplish similar benefits, companies may compare the pricing models of the two rivals to see which provides the higher return on investment.

Could agentic AI become a killer app? Gartner is optimistic. “Intelligent agents in AI will change decision making and improve situational awareness in organizations through quicker data analysis and prediction intelligence,” wrote Tom Coshow, senior director analyst with Gartner’s technical service providers division, in a Gartner report about intelligent agents in AI featured in Network World.

“While you’re sleeping, agentic AI could look at five of your company’s systems, analyze far more data than you ever could and decide the necessary actions,” Coshow added.