These are the bots you’ve been looking for.
AI bots or “agents” – think of them as the overachieving cousins of chatbots – are slowly taking over the front end of the internet, or customer services like booking flights, selling handbags and even handling angry customers.
While the likes of ChatGPT will happily, well, chat, with you all day, these agents are rolling up their digital sleeves and getting sh#t done. Analysts think action-oriented AIs could FINALLY unlock the revenue potential that conversational assistants initially promised.
And Salesforce, a powerhouse in enterprise software, is making waves with Agentforce, a platform for such AI Agents. After it announced the platform in September, its stock climbed some 35% to reach an all-time high last month.
And its earnings on Tuesday were STRONG. Salesforce raised its full-year revenue forecast, suggesting customers are lapping up the new functionality, and added another boost to its shares.
Agentforce represents the next evolution of Salesforce, CEO Mark Benioff said on an earnings call. Companies like FedEx, Accenture, IBM and RBC Wealth Management are already building bespoke agents on the platform as part of some 200 Agentforce deals signed last quarter, he said.
The numbers make the case:
- Salesforce’s stock is up some 26% this year, making Microsoft’s 15% gain look modest. (And at 30 times forward earnings, it’s cheap compared to some other software-as-a-service peers).
- Bank of America sees the stock adding another 17% over the next 12 months.
- Analysts at Jefferies say Agentforce is generating interest from some of Salesforce’s largest customers.
- The latest fund manager disclosures show interest too – Lone Pine Capital and Soros Fund Management bought Salesforce shares last quarter.
Next year “will be the year of the AI agent,” says Jamil Valliani, an AI product leader at Australian tech firm Atlassian.
“They will get even better at performing highly specific tasks, taking specialized actions, and integrating across products, all with humans in the loop.”
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The road ahead
Salesforce has the biggest customer base in the sales or front-office category with more than 135,000 clients.
But Big Tech heavyweights from OpenAI to Google, and everyone in between, are working on their own AI agent builders, which are set to launch in the next 12 months. Microsoft rolled out its offering in October.
While the effectiveness of AI agents matters, the scale of enterprise user base will provide a substantial competitive advantage for big operators like Google and Microsoft.
That will be quite a battle for Salesforce to fight, as these bigger players also have more cash to burn.
A recent Gartner report says the vast majority of IT firms had not progressed their copilot initiatives past the pilot stage, though. Microsoft’s AI business, after billions in investment, brings in about $10 billion annually – a mere 4% of its revenue.
So, has Salesforce found the secret sauce for turning AI dreams into dollars?
