Salesforce Losing At AI

Salesforce (CRM) and its stock are down around 19% YTD, and that goes to show that when you fall behind in the generative AI race, it starts to tank the stock.

CRM has been on the back foot during the AI wars, and that has caused investors to become suspicious of the company.

They only project 2026 revenue growth of around 6% which is extremely low for what was once a thriving growth company.

Sadly enough, it appears that their big investments into AI are paying dividends, and the lack of revenue growth highlights the shortage of progress in the AI department.

So I find it interesting that outspoken CEO Marc Benioff has sounded off on AI and explained CRM’s involvement with it even though it isn’t going that well for them.

Benioff recently stated that artificial intelligence (AI) is handling 30% to 50% of the company’s workload, marking a significant shift in how the cloud software giant operates.

This development, described as a “digital labor revolution,” reflects Salesforce’s aggressive integration of AI to automate various tasks, with implications for its stock price and the broader competitive landscape.

For CRM, AI is automating tasks across multiple job functions, including software engineering and customer service.

In software engineering, AI tools likely assist with code generation, debugging, and testing, streamlining development processes. Salesforce’s AI product, Agentforce, is a key player here, automating tasks that traditionally required human intervention.

For instance, Agentforce has managed 380,000 customer-service conversations with an 84% resolution rate, requiring minimal human oversight. This suggests AI is handling routine customer inquiries, troubleshooting, and even complex interactions, freeing up human agents for higher-value tasks.

By automating 30% to 50% of its workload, Salesforce reduces labor costs, as evidenced by its decision to forgo hiring engineers in 2025 and earlier layoffs of over 1,000 positions.

CRM’s ability to resolve customer service issues at scale with AI gives it an edge over companies relying on human labor, which is slower and costlier. Non-automated companies may lose customers to more agile rivals.

Without automation, companies face higher operational costs, squeezing profit margins. As technology firms like Salesforce reduce expenses through AI, competitors stuck with manual processes will find it harder to maintain profitability, especially in price-sensitive markets.

AI enables rapid data analysis and product development, as seen with Salesforce’s AI-driven forecasting and analytics. Companies not adopting AI may struggle to innovate, missing opportunities to create new products or improve existing ones.

Salesforce’s AI product, Agentforce, has not been good enough, and clients are willing to pay for a shoddy product.

These types of AI chatbots can get really annoying, and people start to turn off once they don’t solve enough.

CRMs own published success rate of 83% for Agentforce leaves a lot to be desired.

There will certainly be growing pains with AI, and in some cases, this technology won’t work well enough.

But CRM has sacrificed its own human labor force, and now customers don’t like their AI products, meaning that humans were doing a better job.

Therefore, Benioff must figure out how to increase CRM’s revenue to 15% and improve their AI product, and if they don’t, the stock will half since it will mean they won’t be part of the AI narrative.

Therefore, until CRM can prove they can do more with AI, I would short any big rally they have in the stock.