Salesforce's AI Ambitions Meet Scrutiny Amid Mixed Financial Signals

What happened

A Seeking Alpha article touts Salesforce's AI-driven turnaround, emphasizing rapid Agentforce adoption and double-digit revenue growth targets through 2030. However, the DeepValue report reveals a more nuanced picture, with record RPO of $63.4B in FY2025 but a recent dip to $59.9B in Q3 2025, signaling potential headwinds. Intense competition from Microsoft Copilot and evolving EU AI Act regulations challenge the optimistic margin expansion and pricing power claims. Despite strong cash flow and a $50B buyback, the company's reliance on AI for growth faces execution risks and competitive pressures. Investors must weigh the bullish narrative against underlying data and market dynamics.

Implication

In the near term, the AI hype could fuel stock volatility, but Salesforce's solid cash flow and capital returns provide a buffer against downturns. Long-term, success depends on outpacing Microsoft in AI adoption and sustaining margin improvements amid pricing pressures. Regulatory hurdles, like the EU AI Act, may slow product rollouts and increase compliance costs. Monitoring RPO trends and subscription growth will be critical to validate the ambitious FY30 targets. Overall, while the upside exists, prudence is warranted due to intense competition and potential over-optimism in AI projections.

Thesis delta

The Seeking Alpha article amplifies the AI growth narrative but does not fundamentally shift the DeepValue BUY thesis, which already incorporates AI momentum with caution. However, it highlights the need for stricter scrutiny of Agentforce adoption rates and competitive responses, as unchecked optimism could mask underlying risks. Investors should maintain focus on RPO stability and margin execution as key validators.