Artificial intelligence has the potential to cause a huge shift in the software industry. That’s created a ton of uncertainty for SaaS stocks, leading the market to sell off shares in most of those companies earlier this year.
While some have recovered, they’re still standing on shaky ground. Companies demonstrating strong momentum in integrating AI into their products and selling AI services should produce accelerating revenue growth and help overcome the fears that struck the market earlier this year.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a “Double Down” signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same “Total Conviction” signal is flashing for a company 1/100th the size of Nvidia. Continue »
One such stock set to produce AI-driven, accelerating revenue growth is Salesforce (NYSE: CRM). Despite solid first-quarter results, shares now trade below their levels ahead of the report. That could make the stock a fantastic opportunity for investors willing to weather the ongoing SaaS-pocalypse.
Image source: Getty Images.
Revenue acceleration is around the corner
The metric for investors to keep their eye on at Salesforce is its artificial intelligence-related revenue. That includes Agentforce, its platform for creating AI agents, and Data 360, its data platform that unifies information from across various applications and supports AI services.
Last quarter, the two combined to produce $3.4 billion in annual recurring revenue, up more than 200% year over year. That figure notably includes $1.1 billion from its Informatica acquisition, so organic growth is close to 100%. Agentforce sales themselves passed the $1 billion annualized run rate threshold, climbing 205% year over year.
AI-related revenue remains a tiny portion of Salesforce’s overall sales. However, the segment’s growth accounts for a substantial share of incremental sales. As the business continues to grow rapidly at scale, it should accelerate overall revenue growth. In fact, management…
..
