Salesforce Taking Longer Than Expected to Shift to AI, Analyst Luria Says

Why It Matters

The divergence highlights a widening winners-and-losers split in enterprise software: Salesforce may remain valuation-constrained until AI-driven growth proves out, while companies securing critical AI infrastructure partnerships like Snowflake can command higher multiples and investor favor.

Summary

Analyst Gail Luria said Salesforce’s pivot to AI and its 360-degree ‘Agent’ vision is taking longer to drive revenue than investors hoped, with disappointing near-term guidance implying organic growth of roughly 6–8% next quarter versus a longer-term double-digit target. The company’s strategy to act as a neutral ‘Switzerland’ for human-agent workflows is plausible given its customer entrenchment, but it has yet to translate into results after two years of deceleration. Investors have priced Salesforce more like a mature cash generator—trading around 10x cash flow—reflecting buybacks and lower-growth expectations. By contrast, Snowflake’s strong earnings and a reported $6 billion AWS deal have reinforced its leadership position in the AI ecosystem and spurred sizable share gains.

Original Description

The shift to AI for Salesforce is taking longer than expected, according to Gil Luria of D.A. Davidson Technology Research. He reacts to earnings from Salesforce and Snowflake on "Bloomberg The Close."

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