Salesforce Soars 20% on Strong Earnings and Anthropic Partnership
Salesforce shares jumped over 20% after beating earnings and expanding its partnership with Anthropic, fueling a software rally.
The stock is on pace for its second-best day ever, trailing only August 2020, when shares jumped roughly 26%. The rally helped lift other software names including Adobe, Palantir, Servicenow, Autodesk and Figma, with the iShares Expanded Tech-Software ETF climbing about 5%.
Salesforce CEO Mark Benioff and Anthropic CEO Dario Amodei appeared on CNBC to unveil a plugin called "Claudeforce," designed to help salespeople access critical data through Anthropic's Claude chatbot. The AI expansion fueled optimism across the software sector, which has been under pressure this year on fears that generative AI could disrupt the software-as-a-service (SaaS) business model.
"This is not the SaaSpocalypse," Benioff said on Wednesday's earnings call. "We've been hearing about this for last two quarters, these dire predictions about the end of software and how the models eat everything, but none of them have come true for us."
The company reported revenue of $11.35 billion, up 11% year-over-year and slightly above the $11.32 billion expected by analysts polled by LSEG. Adjusted earnings per share came in at $5.90, far exceeding the $3.27 estimate. Net income rose 87% from a year ago to $3.53 billion, or $4.29 per share, compared with $1.89 billion, or $1.96 per share, a year earlier.
Salesforce also noted a $2.6 billion gain from its strategic investment in Anthropic, whose valuation has grown to $965 billion ahead of its highly anticipated initial public offering.