Salesforce Q3 Earnings Preview: Focus on Agentforce amid growing efforts to monetize AI

Cloud-based software company, Salesforce (NYSE:CRM) is set to report its third quarter earnings on Tuesday, December 3rd, after the closing bell. Wall Street expects Salesforce to report a 16.2% rise in earnings per share to $2.45, with a year-over-year increase of 7.2% in revenue, to $9.35B.

The main focus of the earnings will be the company’s recently announced Agentforce, which has become the proverbial apple of investor’s eyes.

Unveiled in September, Agentforce is Salesforce’s suit of artificial intelligence agents that can help employees in a number of tasks related to sales, marketing and commerce.

Wedbush Securities said on Monday that it is expecting the company to report a strong set of earnings and guidance. “Our recent field checks indicate that more customers are seeing elevated use cases for CRM’s entire product portfolio….,” analyst Dan Ives wrote in a note to clients.

The introduction of Agentforce by Salesforce in September has helped usher in added confidence that the company is monetizing artificial intelligence, with Ives suggesting that the company could see a boost of $4B in annual revenue by 2025, based on estimates and field work.

Investment firm Deutsche Bank, last week, upped its price target on Salesforce to $365 from $325 and kept its Buy rating. “Agentforce was a major part of conversations with customers post Dreamforce according to our checks, but it’s early days with little deal activity as of yet, though we did pick up a mid 7-figure Agentforce deal,” analyst Brad Zelnick wrote in a note to clients.

Salesforce (CRM) has a history of beating analyst estimates, beating EPS estimates 100% of the time and revenue estimates 88% of the time in the last two years.

Over the last 3 months, EPS estimates have seen 3 upward revisions and 3 downward, while revenue estimates have seen 2 upward revisions and 5 downward.

The cloud computing giant’s fiscal second-quarter results and guidance topped expectations, and it said, looking to the third-quarter, it expects to earn between $2.42 and $2.44 per share on an adjusted basis. Sales are forecast to be between $9.31B and $9.36B, with the midpoint of $9.34B.

Salesforce (CRM) has gained more than 26% in market value so far this year, in-line with the growth in the broader S&P 500 Index.