Sustainable Growth Advisers, LP on Salesforce
Thesis
SGA continues to own Salesforce despite weak sentiment and slower current remaining performance obligation growth. Weakness in Marketing, Commerce and Tableau is being offset by strength in Sales Cloud, Service Cloud, Slack and Data Cloud, while Agentforce annualized recurring revenue reached $1.2 billion and grew 205%. SGA believes Salesforce's deep integration into customer workflows, large installed base and broad product suite position it to compete effectively in agentic AI. The firm expects low-teens earnings growth over the next three years, although it lowered the position to a below-average target weight.
“We lowered the position target to a below-average weight.”
Key risks
- Marketing, Commerce and Tableau remain weak.
- AI-driven competition could pressure growth or customer retention.
- Near-term cRPO growth and forward guidance have been modest.