Once-in-a-Decade Opportunity: 1 AI Software Stock to Buy While It's Still Down

Key Points
Salesforce's AI business is scaling rapidly, with Agentforce reaching annual recurring revenue of $800 million.
The number of large deals is also increasing, highlighting rising enterprise demand for Salesforce’s solutions.
Despite multiple tailwinds, the stock is trading at a relatively modest valuation.
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Enterprise software stocks have come under pressure in 2026 as investors question whether artificial intelligence (AI) could disrupt traditional software-as-a-service (SaaS) models. One of the stocks most adversely affected is Salesforce (NYSE: CRM), with its share price down over 26.6% so far this year (as of March 18).
Salesforce's fiscal 2026 (ending Jan. 31, 2026) revenue was up 10% year over year to $41.5 billion. The company also exited the year with $72.4 billion in remaining performance obligations (RPO, contracted revenue yet to be recognized). Of that, the current RPO (expected to be recognized in the next 12 months) was $35.1 billion, up 16% year over year. Hence, it is obvious that the company continues to secure long-term customers and projects, even as the market debates whether AI could weaken traditional software vendors.
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Growth tailwinds
While Wall Street remains concerned about Salesforce's maturing growth, recent data suggests that the company may be entering a new phase of AI-powered expansion. For the fourth quarter, the company reported a 26% increase in deals worth over $1 million and 33% increase in deals exceeding $10 million on a year-over-year basis.
Salesforce's Agentforce platform, which enables businesses to build, manage, and deploy AI agents to perform various tasks, is also scaling rapidly. Combined with its Data 360 offering, a cloud-native data platform that unifies and organizes enterprise data, these products have already reached $2.9 billion in annual recurring revenue (ARR), up 200% year over year. Agentforce alone reached about $800 million in ARR, up 169% year over year.
Additionally, more than 60% of Agentforce and Data 360 bookings were from existing customers, highlighting the success of the company's cross-selling and upselling strategy. New bookings for premium AI-focused products such as Agentforce One Edition and Agentforce for Apps also nearly tripled sequentially in the fourth quarter.
Salesforce now expects organic subscription and support revenue growth to reaccelerate in the second half of fiscal 2027. The company is guiding for fiscal 2027 revenue of $45.8 billion to $46.2 billion, implying 10% to 11% year-over-year growth. Hence, while concerns about growth are not fully resolved, investors can expect some relief in the coming quarters.
Competitive advantages
Salesforce's AI push appears to be strengthening its broader platform instead of disrupting it. All the top 10 deals secured by the company in the fourth quarter included Agentforce. Informatica, which has strengthened the Salesforce Data 360 platform, was included in six of those 10 wins. Hence, customers seem to be buying the integrated Salesforce stack and not just AI solutions.
Salesforce is also focusing on upgrading its installed customer base involving 100 millions of seats to higher-priced subscriptions that include AI capabilities, by adding more seats as return on investment increases, and by selling consumption-based credits for customer-facing AI use cases. With seats growing sequentially and year over year in the fourth quarter, it appears that AI is accelerating the adoption of Salesforce's platform. That trend also makes sense, since the rapid data center build-out is driving a surge in enterprise data and AI usage, which then increases the need for software platforms that convert data into actionable business outcomes.
Salesforce trades at around 13 times forward earnings, which is lower than its historical average. Considering this relatively modest valuation alongside improving AI-powered growth indicators, the stock seems like a smart buy now.
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Manali Pradhan, CFA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Salesforce. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.