In an interaction with CNBC’s Jim Cramer, Benioff said that frontier models depend on CRM. “They do not replace them.” Frontier models refer to the most recent Artificial Intelligence models, while CRM stands for Customer Relationship Management (CRM), something that is Salesforce’s core business.
Software companies across the world have seen massive wealth erosion during the year so far on fears that AI will go on to replace the services they offer to companies. The Nifty IT index in India too was down as much as 30% this year, led by India’s largest software service providers Infosys, TCS and others, although the index has recovered some lost ground over the last two months after the sell-off seen in chip companies in July, and abating fears that it is not doomsday afterall for these companies.
Shares of Salesforce jumped over 13% in extended trading on Wednesday, after it reported better-than-expected results for the second quarter of fiscal 2027 and also issued guidance that surpassed estimates.
Revenue for the quarter stood at $11.35 billion, higher than estimates of $11.32 billion. It also received a $2.6 billion gain on a strategic investment it made in Anthropic. Earlier this year, Anthropic had raised funds at a valuation of $965 billion, of which, Salesforce was also a part. Free cash flow during the quarter surged to $1.1 billion, a growth of 81% year-on-year, and well above the consensus estimate of $643.2 million.
Salesforce also raised its guidance for the year. It now expects revenue to be between $46.1 billion to $46.4 billion, compared to $45.9 billion to $46.2 billion. The figure was higher than street estimates of $46.11 billion.
For the ongoing quarter, Salesforce expects EPS to be between $3.42 to $3.44, higher than the $3.38 billion estimate. Revenue is also seen between $11.42 billion to $11.5 billion, higher than the estimate of $11.41 billion.CEO Benioff said during the interaction that numbers are proof of AI strengthening the business, rather than cannibalizing it. He added that nine out of the 10 leading AI companies use Salesforce and Slack, with spending on these platforms surging 435% from a year earlier.
Salesforce also has a partnership with Anthropic, under which, it unveiled “Claudeforce” on Wednesday, a plugin which allows the use of Claude to tap customer data stored in Salesforce and perform tasks such as composing emails and updating records.
