Salesforce-AI-Associate download - Salesforce AI Associate Updated: 2024

© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

Salesforce offers a full suite of add-ons available mainly on the SalesForce AppExchange. These optional Salesforce programs include tools to support different needs and industries. Depending on the complexity of those needs, you’ll pay anywhere from nothing to hundreds of dollars for one (or multiple) apps. You can also find add-ons under the “products” tab on the Salesforce website.

Salesforce’s apps come from both first- and third-party providers. They also vary in pricing, often including new tiers that differ from what Salesforce offers. Simple apps, like 360 SMS, start at $7 per month but might cost more depending on how many texts you send. Other apps, like the Salesforce Adoption Dashboard, are entirely free. You also have freemium apps, like JotForm, which are free for the first five forms. 

Each app is different, requiring another knowledge base to learn this optional system. Much like shopping for CRM systems, you must go through testing and adoption phases. Thankfully, Salesforce is a cloud-based SaaS system, meaning you can easily customize it according to your needs. Below, you’ll learn more about some of the most popular add-ons you might consider. 

Pardot Pricing

Salesforce Pardot is a popular marketing automation platform that comes in four tiers. Here’s a breakdown of what those tiers provide:

• Growth: $1,250/mo; focuses on marketing automation 
• Plus: $2,750/mo; provides deeper analytics and personalization features
• Advanced: $4,400/mo; AI support and developer sandbox features
• Premium: $15,000/mo; offers predictive analytics and personalized product support

Pardot supports up to 10,000 contacts, with its higher tier supporting 75,000.

Service Cloud

Service Cloud focuses on the customer support side of Salesforce. It also has identical pricing compared to Sales Cloud (Salesforce’s primary offering). Here’s a breakdown of pricing:

• Starter: $25/user/mo; provides a simple customer case management dashboard
• Professional: $80/user/mo; provides case swarming and computer telephony integration (CTI)
• Enterprise: $165/user/mo; provides AI features and a self-service system for your customer support staff
• Unlimited: $330/user/mo; 24/7 support alongside AI-powered chatbots
• Unlimited+: $500/user/mo; advanced AI support and the ability to better integrate data across Tableau Analytics and Data Cloud

Sales Cloud does not come with Service Cloud. However, you can discuss discounts for integrating both when talking with an account executive. 

CPQ and Billing

Both CPQ and Billing are features you can find under Salesforce’s Revenue Cloud service. 

CPQ (Configuration, Pricing and Quoting) is a flexible pricing system that changes price depending on usage level or optional features. When selling software with add-ons, it can help you simplify billing customers. It comes in two forms:

• CPQ: $75/user/mo; provides limited customization options
• CPQ Plus: $150/user/mo; provides more process control and automated features

Billing is another feature of Revenue Cloud which comes in two forms, although the pricing requires you to call in:

• Growth: Has a built-in invoicing system for scheduling and merging multiple invoices
• Plus: Advanced billing systems based on usage ratings; supports automatic payments

If purchasing the complete sales CRM, some of these features are integrated with advanced plans, meaning you don’t need to pay extra. 

Einstein Analytics

Einstein Analytics is the AI-driven analytics software from Salesforce that comes with the Unlimited plan. Enterprise customers might choose to pay separately, selecting one of the four plans below:

• Einstein Predictions: $75/user/mo; provides simple, automated insights
• CRM Analytics Growth: $140/user/mo; more advanced analytics platform without AI features
• CRM Analytics Plus: $165/user/mo; combines features from Predictions and Analytics Growth
• Revenue Intelligence: $220/user/mo; provides revenue insights as well other features

MuleSoft

MuleSoft is an integration-based platform that connects multiple apps, helps integrate numerous APIs and provides automated systems between those softwares. Another way to look at it: it’s a complex version of Zapier with way more power for programmers. 

MuleSoft’s pricing varies heavily but can cost up to $250,000 per year. You’ll need to call and discuss your unique needs for a quote. 

• Several former Salesforce employees rejoined the company this year as "boomerangs."

• There were also high-profile departures of longtime executives.

• See below for Salesforce's leavers and joiners in 2023.

The end of 2022 was marked by a series of executive departures at Salesforce, including the exit of co-CEO Bret Taylor, who had been heir apparent to CEO Marc Benioff.

2023 was also a year of change, starting with a major restructuring that included laying off 10% of the company's workforce and ending with some old familiar faces in the C-suite.

In the wake of pressure to up profit and cut costs from a group of activist investors, including Elliott Management and Starboard Value, some longtime company veterans left, and former executives have returned to help. Benioff affectionately refers to those who have re-joined as "boomerangs," and he has called for more to come join them as Salesforce ramps up generative AI efforts.

Meanwhile, chief operating officer Brian Millham's influence at the company is on the rise. Some have speculated he could be first in line to succeed Benioff as CEO — if and when Benioff decides to step down.

Below is a list of the major Salesforce executive changes in 2023.

COO Brian Millham took on additional responsibilities. He now oversees about 70% of Salesforce's employees.

President and COO Brian Millham has been with Salesforce since 1999, but his influence at the company has ballooned in the last 18 months, which has caused some speculation that he could be first in line to succeed CEO Marc Benioff. In 2023, Millham's purview expanded to include marketing, employee success, and business technology, in addition to his other responsibilities — global sales, customer success, global alliances and channels, and professional services. Millham was promoted to COO, two years after a promotion to chief customer success officer and COO of global distribution.

Chief business officer Ebony Beckwith left Salesforce after 14 years.

By the time company veteran Ebony Beckwith left Salesforce in May, she held three different titles: chief business officer, chief of staff to Marc Benioff, and CEO of Salesforce Foundation. Neither Salesforce nor Beckwith gave a reason for her departure. Her LinkedIn profile has not been updated with a new job. Beckwith joined Salesforce in 2008 and began leading philanthropic efforts in 2014.

Former CMO Sarah Franklin is leaving the company at the end of the year to join Lattice as CEO.

After 15 years at Salesforce, Sarah Franklin has been named CEO of HR software startup Lattice, run by Jack Altman, brother of Sam Altman. She starts on January 2. In June, Franklin moved from her role as Salesforce's chief marketing officer to chair of the advisory board alongside Alex Dayon, who is retiring at the end of the year. Franklin was named president and CMO in 2021. She joined the company's marketing department in 2008.

Ariel Kelman returned to Salesforce as chief marketing officer.

Former Oracle CMO Ariel Kelman took the top marketing job at Salesforce in June. Kelman is one of Benioff's "boomerangs" — he first worked for Salesforce from 2005 to 2011, when he left to run worldwide marketing at Amazon Web Services. After eight years at AWS, Kelman spent a year and a half as CMO of Oracle. Kelman left Oracle in August of 2022 after the restructuring of the marketing organization he'd spent nearly two years building. At the time, sources told Business Insider that Kelman had clashed with Oracle CEO Safra Catz over the changes, which included mass layoffs.

Former Okta CMO Kendall Collins joined Salesforce as Marc Benioff's chief of staff.

Another of Benioff's "boomerangs," Collins joined Salesforce in April as chief business officer and chief of staff, roles previously held by Ebony Beckwith. Collins first worked for Salesforce from 2004 to 2016 after spending the first few years of his career at Oracle. Most recently, Collins was CMO of cloud software company Okta. He left that role in February of 2022, staying on as an advisor.

Former chief people officer Brent Hyder left Salesforce in August for VF Corp.

Hyder's relatively short — but busy — run at Salesforce ended in August when he left to join apparel group VF Corp. as chief people officer. In the four years he was at Salesforce, Hyder's human resources organization oversaw a pandemic-fueled hiring spree, followed by a major restructuring initiative that included laying off 10% of the company. In June, Insider reported that Hyder offended some employees with comments he made during a Pride Month event. Hyder joined Salesforce in 2019 from Gap Inc., where he had been chief people officer.

Miguel Milano joined Salesforce as chief revenue officer.

Milano joined Salesforce as president and CRO in August. Another "boomerang," Milano first worked at Salesforce from 2011 to 2020, eventually overseeing the international sales organizations for Europe and the Middle East, Latin and Central Americas, Africa, and Asia-Pacific regions. Milano left Salesforce in 2020 for the German data processing company Celonis, where he was CRO until his return to Salesforce. Former Salesforce CRO Gavin Patterson left the company in January.

Lidiane Jones is leaving Slack to take the top job at Bumble.

Jones, a Salesforce product executive who was named CEO of Slack in January, was recently appointed to succeed Whitney Wolfe Herd as CEO of Bumble Inc. Jones starts at Bumble in January. She joined Salesforce in 2019 from Sonos Inc. and quickly worked her way up from vice president of product for Commerce Cloud to overseeing the entire division. Denise Dresser, a Salesforce executive, will replace Jones as Slack CEO.

Advisory board chair Alex Dayon is retiring at the end of the year.

Dayon, a 15-year Salesforce veteran, is set to retire at the end of the year, Salesforce said in June. He is currently president and special advisor to the CEO, working remotely from Paris, according to his LinkedIn. He was previously president and chairman of the advisory board, reporting directly to Benioff, and before that, held chief strategy at product roles. Dayon joined Salesforce in 2008 and at one point, was gifted an electric BMW by Benioff.

A new chief legal officer joined. The chief trust officer left.

After 18 months as Salesforce's chief trust officer, Vikram Rao left the company in October to take the top cybersecurity role at Atlassian.

In June, Sabastian V. Niles joined Salesforce as president and chief legal officer. Niles, formerly a partner at Wachtell, Lipton, Rosen, & Katz, had been counseling Salesforce as it responded to a group of activist investors earlier in the year.

Read the original article on Business Insider

This year did not start off great for Salesforce, with an unusual level of turbulence and uncertainty surrounding the company. But as the year comes to a close, Salesforce finds itself in surprisingly good shape financially: Its stock is up over 96% year-to-date. Earlier this year, such an outcome would have seemed impossible to imagine.

The bad news started rolling in even before the new year began, when co-CEO Bret Taylor, who many speculated was being groomed to be heir apparent to Marc Benioff, quite suddenly announced he was leaving the company at the end of November. A week later, Slack CEO and co-founder Stewart Butterfield announced he, too, was stepping down. Losing two key executives in less than a week would be a huge hit to any company, but it would be just the start of an onslaught of bad news for the CRM giant.

As the year began, we learned that activist investors were, well, quite active inside the company. This included Elliott Management, Starboard Value, ValueAct Capital, Inclusive Capital and Third Point. When activists show up, they usually have a strong opinion on how to “fix” a company, and this would be no different.

First, we learned that Salesforce was bringing in three new board members, which felt like a way to appease the activists — especially because one of them was Mason Morfit, CEO and chief investment officer of ValueAct, one of those very same activists.

Activists typically pressure the company to cut costs, and in corporate terms, that usually means cutting staff. Sure enough, Salesforce soon announced that it was cutting 10% of its workforce, or 7,000 people, on January 4, 2023. The excuse was that it had overhired during the pandemic and this was a correction, but it could also have been throwing the activists a cost-cutting bone.

Either way, reports suggested the company didn’t handle the layoffs well, engineers were being pressured, and Benioff began preaching about going back to the office after embracing work from home, and what Salesforce called the “Digital HQ,” during the pandemic. The company’s reputation as a progressive, employee-friendly organization took a big hit.

Salesforce announced expanded capabilities of its generative AI assistant Einstein Copilot, enhanced integrations with Apple offerings and more today at the Salesforce World Tour New York 2023 event. The addition of the Data Cloud Vector Database to the Salesforce Data Cloud will allow both the Salesforce Data Cloud and Einstein Copilot to handle unstructured data.

Salesforce announced several other enhancements to its business software, particularly within Data Cloud for Advertisers. These products could be useful for a wide variety of teams, including IT, sales, customer service, marketing and commerce.

Jump to:

AI enhancements to Salesforce Data Cloud

Einstein Copilot

A major enhancement to Salesforce Data Cloud is Data Cloud Vector Database, coming in a pilot program in February 2024. Data Cloud Vector Database is integrated vector database support that allows for the use of a wide variety of data types. Unstructured data — e.g., PDFs, email, audio and social media content — will be combined with structured data — e.g., purchase history, customer support cases and product inventory.

Einstein Copilot, Salesforce’s generative AI assistant, will be able to use unstructured data to respond to questions or perform analysis; it will access this data through Salesforce Data Cloud. Einstein Copilot will be generally available in February 2024.

“This transforms every piece of data — from emails to social media posts to audio — into actionable insights using AI, CRM, automation, AI, Einstein Copilot, and analytics,” said Rahul Auradkar, executive vice president and general manager of Unified Data Services and Einstein at Salesforce, in a press release.

Possible use cases of Einstein Copilot include:

• Customer service: Einstein Copilot’s unstructured data will be able to be used for customer service. The example Salesforce gave is of a chatbot pulling answers from articles for a customer visiting a self-service page.
• IT teams: Einstein Copilot can be used to help IT teams uncover problems in unstructured content produced in machine operations, such as logs, sensor readings or image and audio records.
• Sales reps: Einstein Copilot can help sales reps get more information about a potential client company before meeting with that company’s representatives.

Einstein Copilot Search

Another enhancement for Salesforce Data Cloud will be Einstein Copilot Search, which will be in pilot in February 2024. Einstein Copilot Search draws from data across Data Cloud to provide smart suggestions for searches. It will be useful for problem-solving tasks performed by sales, customer service, marketing, commerce and IT teams. For example, Einstein Copilot search will be able to link a customer’s emails and phone calls to their formal support ticket history to assist a customer service representative.

Expanded Salesforce and Apple partnership

Apple Messaging, Apple Pay and augmented reality will be accessible directly in certain Salesforce products. Salesforce and Apple have had a strategic partnership since 2018.

Specifically, Apple Messages for Business in Service Cloud, generally available today with Salesforce’s Service Cloud Digital Engagement, will let businesses set up live chat experiences with customers for customer service, product recommendations, tracking shipments or setting up appointments. Customers can pay for services and products with Apple Pay within the Messenger app.

Augmented reality with Apple’s ARKit will be available within the Salesforce Field Service mobile app in the summer of 2024. With it, field technicians can capture 3D renderings of real locations to make planning and installations easier.

The Salesforce Field Service iOS widget will be available for iPhones in the summer of 2024. It provides a quick view of key account information in Salesforce Field Service.

AWS partnership and more Salesforce news

At Salesforce World Tour New York 2023, Salesforce’s AWS partnership was highlighted and other news was announced.

Details about Salesforce’s partnership with AWS

Salesforce reiterated the company’s partnership with AWS announced in November 2023, in which Salesforce expanded its use of AWS in multiple ways:

• Salesforce began offering products on AWS Marketplace.
• Some Einstein Studio Copilot capabilities will be able to be integrated with Amazon SageMaker and Amazon Bedrock.
• Amazon Connect Chat came to Salesforce’s Service Cloud Digital Engagement.
• Amazon Connect forecasting was added to Salesforce Service Cloud Omnichannel.
• Salesforce’s app builder Heroku will receive powerful new capabilities from AWS services that allow it to become a factory for generative AI-first apps.

News about Trailblazer Career Marketplace, Unlimited Edition+, Data Cloud for Advertisers

Salesforce opened a new jobs site for careers within the Salesforce ecosystem called Trailblazer Career Marketplace, which is open today to Salesforce partners.

Salesforce announced Unlimited Edition+, a package of Salesforce technologies for companies interested in getting into generative AI, data and CRM. UE+ is now in general availability.

New integrations are coming to Data Cloud for Advertisers. Data Cloud for Advertisers will be able to connect to Google Display & Video 360 for personalized ads across channels. Data Cloud for Advertisers will be able to connect to LinkedIn, letting advertisers target specific groups of professionals using Marketing Cloud, Sales Cloud and Service Cloud product usage data from their own apps and LinkedIn.

Note: TechRepublic is covering the Salesforce World Tour New York 2023 event virtually.

Salesforce, Inc. (NYSE:CRM) stock has maintained gains from its latest post-earnings surge following delivery of an impressive cost-cutting campaign without compromising significantly on its business growth prospects. The consistent fundamental improvements observed in recent quarters imply that Salesforce is establishing a value proposition to its AI strategy. While we had previously feared that AI democratization would dilute Salesforce’s market share in customer relationship management (“CRM”) software, the company has instead continued to reinforce its grip in the industry by ramping deployment of newly introduced value-add features. These include the Einstein Trust Layer and an integrated Data Cloud to better facilitate customers’ existing CRM needs in the AI era. The effectiveness of Salesforce’s emerging AI strategy is corroborated by stabilizing growth in the low double-digit percentage range during recent quarters following a period of steep deceleration last year due to the cyclical downturn in enterprise IT spending.

The company’s increasing utilization of self-service sales channels where application, as observed through its recent partnership with Amazon Web Services Marketplace (AMZN), also marks a key approach for reducing marketing and sales costs – the largest portion of its operating expenses. This permits the reallocation of resources to funding growth investments, particularly Salesforce’s AI CRM strategy, which management views as the priority to stay economically and technologically competitive.

Looking ahead, we would expect further cost improvements at Salesforce heading into fiscal 2025, as new developments introduced in the current year – including Einstein GPT, Einstein Trust Layer, and other features/bundles associated with the ramp of Data Cloud offerings – continues to scale. And this will likely become the key compensating factor to Salesforce’s new normal of maturing growth in its core Sales and Service Cloud offerings.

Value Proposition in AI CRM

The deceleration in Salesforce’s core Sales and Service Cloud sales have stabilized in recent quarters, which corroborates increasing uptake in recently introduced AI CRM features, including Einstein. The incremental advancements made to the Data Cloud in recent quarters is likely bolstering adjacent demand as well by addressing customers’ increasing need for an integrated data strategy supportive of their respective AI strategies.

As discussed in our previous coverage, Salesforce’s newly introduced slate of Einstein GPT solutions integrated across its key analytics, productivity, and PaaS offerings have been key to its AI CRM strategy. While Einstein GPT-enabled applications offered by Salesforce primarily relies on third-party technology (i.e., OpenAI’s GPT model), the company has sought to boast its unique value proposition through the Einstein GPT Trust Layer. The Trust Layer effectively addresses enterprise data security needs in the process of adopting emerging generative AI technologies, while also catering to industry’s ongoing cost and performance optimization demands.

Specifically, the company’s proprietary Einstein Trust Layer allows customers to build their respective generative AI-enabled CRM solutions on Salesforce’s platforms without the need to move or store their data within the model, thus enabling a “secure and trusted” experience critical to the enterprise environment. With the Einstein Trust Layer having only recently entered general availability (“GA”) in October, we expect ensuing demand to have an improved impact in sustaining the company’s overall sales growth heading into fiscal 2025.

And to better improve user experience and cost effectiveness in customers’ transition to AI CRM software, Salesforce has introduced a slate of advancements to its Data Cloud and Einstein offerings, including the latest “Einstein 1 Platform.” The Einstein 1 Platform essentially takes Data Cloud integration to AI-enabled CRM solutions offered through Sales and Service Cloud to the next mile by allowing integration of customers’ data into models for building generative AI applications via a simplified low-code process. This feature is realized through the unification of disparate data sources within the Data Cloud for customers, enabling a “common language” that allows different applications built on Salesforce Platforms to communicate and interact with one another, and create value for customers.

The introduction of Einstein 1 Platform and its integration with Data Cloud effectively enhances workplace productivity, while also improving costs and reducing time to deployment for customers. The value proposition directly addresses the ongoing call for cloud spend optimization in the industry, while also catering to customers’ increasingly urgent need for the scalable adoption of AI solutions to maintain economic and technical competence, thus reinforcing demand for Salesforce’s CRM solutions.

In addition to the Einstein 1 Platform, the recently introduced Einstein Copilot AI assistant and Einstein Copilot Studio AI app builder offerings currently in pilot phase are also experiencing strong uptake amongst customers, which is corroborative of growing momentum in Salesforce’s AI CRM strategy. In the latest earnings call, management has reported a 17% adoption rate for Einstein Copilot amongst the Fortune 100 during the current pilot go-to-market phase, which underscores significant headroom for incremental adoption. Both features are also reliant on integration with Data Cloud, underscoring the critical role of the platform’s advancements in supporting CRM experiences in the AI-first environment.

More importantly, the Data Cloud is now offered at no additional charge for all Enterprise Edition+ customers, which helps to improve the exposure of Salesforce’s growing slate of AI CRM offerings to customers, and reinforces its prospects in capturing related opportunities. This is consistent with progress made in Salesforce’s improved product bundling strategy in recent quarters following the announcement of price increases during the summer, which management expects to impact new and upcoming contract renewals that will have a gradual impact on growth over the next three years.

In addition to Data Cloud’s availability through Enterprise Edition+ (“EE+”), Salesforce has also included its Einstein GPT-enabled CRM apps through its priciest Unlimited Enterprise+ (“UE+”) premium tier. With the rolling GA of recently introduced Einstein GPT apps, management has specified improved adoption rates on the UE+ tier during the fiscal third quarter. This effectively reinforces prospects of growth in multi-cloud deals and longer-term pricing gains at Salesforce, as up-tiered UE+ customers have already been observed to increase their spend on the platform by more than 70%. Taken together, Salesforce’s AI CRM strategy continues to deliver consistent positive progress supportive of sustaining normalized growth in the double-digit percentage range over the longer term, even as cost-cutting efforts continue.

Cutting Where it Matters Most

Meanwhile, Salesforce has also continued to deliver on its commitment to reducing costs and enabling a sustained pace of profitable growth. Management’s raised guidance for full year operating margins – even after an 800 bps y/y improvement – and cash flows, while maintaining a stabilizing pace of growth in recent quarters, effectively assuages investors’ concerns that ongoing cost-cutting efforts will “come at the expense of revenue growth.” The nimble balance between cost reductions and sustained growth is further observed through Salesforce’s revamped go-to-market strategy. In addition to significant headcount reductions across the board this year, Salesforce is further drilling into reducing marketing and sales expenses – its largest operating cost center – through the reliance on channel sales partners.

This includes the company’s recently announced availability of its CRM applications, as well as data analytics and productivity solutions like Tableau and MuleSoft on AWS Marketplace. Salesforce’s newly announced go-to-market strategy through AWS Marketplace will be key to further reducing its marketing and sales costs, as it encourages a greater volume of self-serve deployments of its offerings across customers. It will also help to address customers’ cost and time to deployment optimization needs by allowing seamless integration of AWS data into Salesforce products purchased through Marketplace.

Meanwhile, the partnership is expected to reinforce Salesforce’s exposure to AI CRM opportunities by leveraging AWS’ massive reach into the enterprise segment. Specifically, AWS is currently the leading primary cloud service provider, commanding about a third of the market share. Approximately 30% of large enterprises generating annual revenue of more than $5 billion, and about 60% of cloud needs across medium-sized enterprises with annual revenue between $1 billion and $5 billion uses AWS as their primary cloud service provider, which complements Salesforce’s aspirations to further its reach into AI CRM opportunities.

The combination of reduced sales and marketing outlays and expanded market reach enabled by the partnership with AWS Marketplace underscores an effective strategy for Salesforce to further improve profit margins without compromising on revenue growth. It also paves way for additional channel sales partnerships with other major hyperscalers, including Microsoft Azure (MSFT) and Google Cloud Platform (GOOG, GOOGL), in the future, which would reinforce Salesforce’s market share gains in AI CRM opportunities ahead.

Fundamental and Valuation Considerations

The combination of a unique value proposition in enterprise CRM software through Salesforce’s proprietary Einstein AI offerings, alongside seamless integration of Data Cloud continues to reinforce the company’s moat in the industry. Meanwhile, increasing reliance on a self-serve go-to-market strategy via hyperscaler partnerships where applicable also mitigates Salesforce’s exposure to both macroeconomic and optimization headwinds by addressing customers’ efficiency needs, while also optimizing its marketing and sales efforts. The combination will be key to sustaining Salesforce’s current pace of likely normalized, albeit slower, growth going forward, and complement the growing impact of recent price hikes on services provided over the next three-year horizon as expected by management.

Meanwhile, the stabilizing growth set-up will likely compel a continued market focus on Salesforce’s margin expansion and cash flow prospects. We believe there is incremental room for further reduction in Salesforce’s marketing and sales costs, particularly as management expects greater reliance on channel sales. The newly introduced AI CRM offerings are also expected to scale and improve overall operating leverage.

However, we remain cautious of execution risks over the longer term – specifically, Salesforce’s aggressive cost-cutting efforts need to be a balanced endeavor to prevent erosion of its future growth prospects. Despite secular tailwinds to its AI CRM strategy, and Salesforce’s increasing role as the standardized enterprise CRM solution provider, the company has yet to demonstrate an ability in driving value accretive gains supportive of growth reacceleration, nor structural advantages in preserving its market share leadership against disruption from competitors – including Microsoft’s recent deployment of generative AI-enabled Sales Copilot software aimed at taking share from the CRM market.

Taken together, our forecast expects Salesforce’s growth prospects to stabilize at a 12% five-year CAGR, with limited room for significant growth reacceleration in subscription and support revenues. Specifically, anticipated momentum in Data Cloud uptake is expected to complement demand for AI CRM solutions offered across the Sales and Service Clouds, and offset maturing growth in legacy solutions within Salesforce’s “highest grossing” segments.

Meanwhile, our forecast estimates further expansion of GAAP operating margin over the next five years. In the upcoming quarter alone, even based on Salesforce's lower range revenue guidance, the company is well-positioned for another EPS beat of as much as $0.20 like it did in Q3. This is expected to be primarily driven by the continued scale of rolling GA on recently introduced AI CRM solutions, as well as incremental cost reductions stemming from greater reliance on self-service purchases and other sales optimizing efforts. The undertakes are expected to at least maintain the cost structure and profit margins observed in Q3 and potentially take Salesforce's EPS beyond $1.40 in the current quarter, compared to management's guide at the $1.20-level.

Salesforce_-_Forecasted_Financial_Information.pdf

As a result of our latest adjustments to Salesforce’s fundamental forecast based on its recent performance and forward prospects as discussed in the foregoing analysis, we are upping our price target for the stock to $249.

The price target is derived using the discounted cash flow (“DCF”) approach, which considers cash flow projections taken in conjunction with the foregoing fundamental analysis on Salesforce. The upward revised price target is primarily the result of Salesforce’s continued cash flow growth outperformance realized through its sustained pace of profitable growth observed in recent quarters, which offsets conservatism over the forward normalized risk-free rate environment.

Specifically, our analysis applies an estimated perpetual growth rate of 7% on projected fiscal 2028 EBITDA. The perpetual growth assumption applied is equivalent to 2% on projected fiscal 2033 EBITDA when Salesforce’s growth profile is expected to normalize in line with the pace of estimated economic expansion across its core operating regions.

Our analysis also assumes an 11% WACC in line with Salesforce’s risk profile and capital structure relative to the anticipated normalized risk-free rate of 4.5% considering the “higher for longer” monetary policy stance. Despite our optimism for another round of earnings beat in Q4, we remain cautious of the uncertain interest rate backdrop in the near-term, which continues to serve as a key roadblock to unlocking pent-up value in the Salesforce stock.

Final Thoughts

Salesforce’s continued realization of cost-savings without compromising on its recent growth trajectory remains a bright spot. The achievement continues to bolster returning market confidence in Salesforce’s ability to sustain a normalized pace of growth at current levels, supported by improving demand for its proprietary AI CRM offerings. The results have also demonstrated Salesforce’s ability to effectively mitigate against market share dilution risks given the increasing democratization of AI access across the broader software industry, which helps to preserve its moat as the standard enterprise CRM solution provider.

Despite significant growth deceleration from its heyday, Salesforce’s continued margin expansion and cash flow growth efforts will remain a key focus area for investors and upside driver for the stock. However, from a valuation perspective, we believe the stock's fundamental-driven upsides continue to be impacted from broader market risks in the near-term. We believe this could potentially harbinger a compelling buy opportunity in the next 12 months to optimize participation in Salesforce's longer-term upside potential realizable through its improving cash flows.