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Salesforce is moving sharply lower today despite delivering a solid Q2 (Jul) beat and increasing its share buyback authorization by $20 bln, bringing the total to $50 bln. The issue lies in the Q3 (Oct) revenue guidance, with the mid-point falling short of analyst expectations, which is reigniting concerns that Salesforce's AI investments are not translating into revenue fast enough.

• Current Remaining Performance Obligation (cRPO) rose 11% yr/yr (10% CC) to $29.4 bln, above prior guidance of 10% (9% CC), driven by strong execution in SMB and large deals. However, it declined sequentially from Q1's $29.6 bln and slowed from 12% yr/yr growth in Q1.
• AI/Data Cloud Annual Recurring Revenue (ARR) exceeded $1.2 bln in Q2, up 120% yr/yr.
• Agentforce, Salesforce's AI platform launched in Oct. 2024. Salesforce has closed over 12,500 deals since launching Agentforce, including 6,000+ paid. Over 40% of Q2 bookings for Data Cloud and Agentforce came from existing customer expansion.
• Strength was seen in the US and parts of EMEA (notably Netherlands and Switzerland), while UK and Japan were weak. Technology and communications/media verticals performed well; retail, consumer goods, and public sector remained cautious.
• Q2 benefited from one-time license and professional services revenue.

Briefing.com Analyst Insight:
Salesforce's Q2 was solid on paper, but the underwhelming Q3 outlook and slowing cRPO growth suggest that enthusiasm around AI is not yet translating into sustained top-line performance. While Agentforce is gaining traction, investors are questioning whether CRM can compete effectively with AI-native apps and custom-built solutions. The stock has been trending lower since Dec. 2024, and without clearer signs of durable AI-driven growth, it's tough to justify chasing it here.