Salesforce stock climbs 11% as AI push drives revenue and optimism

Salesforce stock jumps on Wednesday, climbing as much as 11% to $367.20, after the enterprise software maker posted better-than-expected revenue in its third-quarter fiscal 2025 earnings report. While adjusted earnings per share missed Wall Street estimates due to a one-time investment loss, the company’s revenue and key performance metrics outperformed, bolstering confidence in its AI-powered tools.

Revenue exceeds expectations, AI products gain traction

For the quarter ending October 31, Salesforce reported $9.44 billion in revenue, an 8.3% year-over-year increase, surpassing analyst estimates of $9.35 billion. Subscription and support revenue, which constitutes the majority of Salesforce’s business, grew 9% to $8.88 billion. Adjusted operating margin rose to 33.1%, exceeding the anticipated 32.2%.

Despite reporting non-GAAP diluted earnings of $2.41 per share—impacted by an 18-cent strategic investment loss—analysts remain optimistic about Salesforce’s financial trajectory, citing its AI-powered tools as a driver of growth.

AI strategy redefines Salesforce’s market position

Salesforce’s recently launched Agentforce product has become the centrepiece of its AI strategy. Introduced in October, the Agentforce product launch automates customer support and sales tasks, reducing the need for human intervention. Priced at approximately $2 per conversation, the product is already demonstrating strong market appeal.

Chief Executive Officer Marc Benioff described Agentforce as a transformative solution poised to redefine enterprise workflows. He reaffirmed Salesforce’s commitment to AI-powered tools, stating that the rise of autonomous agents represents “a groundbreaking transformation” across industries.

Benioff also revealed plans to hire 1,000 employees to accelerate the Agentforce product launch, a notable reversal after two years of cost-cutting measures, including layoffs.

Financial discipline supports shareholder value

The enterprise software maker maintained its focus on profitability, with GAAP operating margin rising to 20% and non-GAAP operating margin reaching 33.1%, up 190 basis points year-over-year. Operating cash flow grew 29% to $1.98 billion, while free cash flow rose 30% to $1.78 billion.

The company returned $1.6 billion to shareholders through share repurchases and dividends during the quarter, bringing its total capital returns to over $20 billion.

Amy Weaver, President and Chief Financial Officer, highlighted Salesforce’s disciplined growth strategy, noting the company’s ability to drive shareholder value while expanding its AI-powered tools.

Revised guidance fuels optimism

Salesforce raised its full-year fiscal 2025 revenue guidance, now expecting $37.8 billion to $38.0 billion, reflecting an 8% to 9% year-over-year increase. It also boosted its operating cash flow growth outlook to 24%–26%.

Fourth-quarter revenue is projected to reach $9.9 billion to $10.1 billion, up 7%–9%. With AI-powered tools like Agentforce leading the charge, the company anticipates sustained demand across its customer base.

Analyst sentiment and stock performance

Analysts have praised Salesforce’s ability to capitalise on AI trends, suggesting its new offerings position the company as a leader in digital transformation. Salesforce stock jumps reflect investor confidence in its strategic pivot.

Salesforce’s results underscore the company’s dual focus on innovation and financial discipline, leaving stakeholders optimistic about its long-term growth prospects.