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Tech giant Salesforce (CRM) reports its fiscal 2026 first quarter results after the market close on Wednesday, May 28. Citizens head of technology equity research Pat Walravens says the company is "heading in the right direction," but going through a "tricky transition." Hear more from him in the video above.
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Pat, I I do want to turn to Salesforce because we're going to hear from them next week. Um and I'm curious how you see them sort of stacking up in in this environment that you've been talking about.
Yeah. So big picture first of all. Snowflake just grew right in the high 20s. Salesforce is kind of moving along at like 9% growth. So, um that is, you know, way below what what historically we've thought of this uh business is doing. And they have a really tricky transition in front of them right now, which is they are trying to shift from selling seats of, you know, um Salesforce automation software or call center software to selling uh a product they call Agent force, which is exactly what it sounds like. It's selling AI agents and those are priced on um on consumption and in fact, Salesforce just changed the pricing last week. So there's there's there's uh Salesforce is heading in the right direction. They're trying to work through a big transition and we'll see how that all plays out when they report.
And Pat, I mean, it's just interesting. You look at Salesforce, look at Benioff's company, the stock. I mean, we're down about 20% this year. We're basically flat over the past 12 months. Are there catalysts that we could look look to Pat that that may get this stock working again?
Yeah. And so the the the big catalyst will be uh the customers who buy Agent force actually starting to deploy it at scale. So far, they've gotten like 5,000 customers to start using it. The issue is that um uh you know, as Julie was talking about just a minute ago, it's it's tricky to get these things to work in a way that make your customers happy. So so companies are rolling them out slowly and making sure that they really get the results they want. And since they're consumption based, if you roll it out slowly, that means the revenue that comes from it is slow. And so I think that's been I think that's been slower than than uh Mark Benioff had hoped. But look, he's been running this business now for 25 years. Um he has a real gift for finding, you know, the next place to move the company to and where the demand is and what I hear is that he's very engaged right now. So um I think I think I think they're headed in the right direction. I think they'll make it work. Um it is a little tricky at the moment. So a little choppy at the moment.
