Salesforce is having a banner 2023 with its share price up 52% on a year-to-date basis and with a rising market capitalization of $192 billion.
Profit-wise, Salesforce isn’t necessarily looking at stronger sales numbers to get that job done. In fact, it’s prioritizing curbing operating costs as much as sales revenues and it’s prepping artificial intelligence applications to meet its cost-cutting goals.
In September, Salesforce rolled out its new Einstein 1 platform and Einstein Copilot feature. In a word, Copilot is a conversational AI assistant that is now integrated into all Salesforce user interfaces.
Wall Street analysts say that Salesforce should start reaping bottom-line benefits, with UBS calling for a 1% revenue boost from the company’s Generative AI program in 2025.
Others agree, noting Salesforce should garner long-term gains from its AI investments.
“With the company’s platform holding vast amounts of customer data, we see Salesforce as well-positioned in the front office and continuing to make the right investments to build on the platform’s strengths,” William Blair analyst Arjun Bhatia said in a recent research note.
Salesforce CFO Amy Weaver, speaking at Salesforce’s 2023 Dreamforce Conference with Yahoo Finance’s Brian Sozzi, reiterates her company’s commitment over the next decade noting that Salesforce’s AI integration will develop slowly.
“(AI) has the possibility to change every company and every company is financials,” Weaver said. “We’re really at the beginning of the AI revolution. Right now, we’re focused on how we can best serve our customers, how we can educate them, how we can really get them ready for what’s coming with AI.”
Noting Salesforce “hit it out of the park” on its recent earnings numbers, especially on revenues, operating margin, and cash flow., Weaver says Salesforce is in a good position to establish a solid AI framework.
“We were also able to raise all of those points in our guidance. So we’ve raised our revenue for the year, raised our margin, raised our cash flow,” she says. “Now, with artificial intelligence, we’re excited about that,” she added. “But it’s not part of our guide for this year. That’s going to be more of a future event.”
One short-term AI deployment that Salesforce is leaning into is public education, which the company believes is a learning incubator for its future workforce.
“Salesforce is incredibly dedicated to public education,” Weaver says. “Probably the most fun thing I have done at Dreamforce is I went across the city yesterday to George Washington High School, where we announced another $20 million donation from Salesforce to public schools.”
The donation is largely intended for artificial intelligence applications for the school.
“We’re focusing on getting AI technology into the hands of our students,” Weaver notes. “It’s not entirely altruistic from Salesforce. These are our future employees. We need these students to have the best skills, the best technology, and the best future.”
Brian O’Connell, a former Wall Street bond trader and best-selling author, is a prominent figure in the finance industry. With a substantial background as an ex-Wall Street trader, he has authored two best-selling books: ‘The 401k Millionaire’ and ‘CNBC’s Creating Wealth’, demonstrating his profound knowledge of finance and investing.
Brian is also a finance and business writer for esteemed national platforms and publications, including CNN, TheStreet.com, CBS News, The Wall Street Journal, U.S. News & World Report, Forbes, and Fox News.
