Salesforce Earnings Split Winners From Software Stocks

Salesforce shares jumped 22.6% on Thursday after seats grew and Agentforce recurring revenue topped $1.5 billion. The main U.S. software exchange-traded fund only just turned positive for 2026. Last week’s bounce paid the vendors that own the customer record and the security layer, not every name in the fund.

Salesforce Just Answered the Seat Question

After the close on Wednesday, Salesforce reported results for the quarter ended July 31 and put a number on the fear that had hung over software stocks for a year. The company posted a current remaining performance obligation of $33.5 billion, up 14% from a year earlier, and said net new annual order value was the strongest in four years. Revenue was $11.3 billion, up 11%, including $456 million from Informatica.

Chair and CEO Marc Benioff went straight at the seat thesis on the call. Skeptics had argued that as staff used AI tools, companies would buy fewer subscriptions. He said the opposite showed up in the books.

Our seats were supposed to decline. Instead, Agentforce sales, service and Slack all saw year-over-year growth

Marc Benioff, Chair and CEO, Salesforce earnings call

Agentforce annual recurring revenue exceeded $1.5 billion, up more than 240% year over year, and the combined Agentforce and Data 360 book reached nearly $3.9 billion. Customers ran 3.2 billion agentic work units in the quarter, up 97% from the prior one, and Slackbot users grew more than 150%. Bookings from the premium Agentforce One Edition and Agentforce for Apps SKUs more than doubled quarter over quarter, which is the upgrade path Wall Street had been waiting to see.

The raise in the outlook was smaller than the stock move. Salesforce lifted fiscal 2027 revenue guidance to $46.1 billion to $46.4 billion, a $200 million increase that is $300 million in constant currency. Of that, $100 million is organic growth, $200 million is the pending Contentful and Fin deals, and $100 million is a foreign-exchange headwind. Zacks noted that investment gains helped the earnings-per-share beat. GAAP diluted earnings were $4.29, up 119%, and non-GAAP earnings were $5.90, up 103%.

Benioff posted the print the same evening, with a line that also describes who collected in the rest of the sector.

#1 Q2 in Salesforce history.
$11.3B Revenue. +11%
$33.5B cRPO growth. +14%
$5.90 Non-GAAP EPS. +103%
$15.2B TTM Free Cash Flow.
$3.9B Agentforce + Data 360 ARR.
7.0B AWUs delivered all-time.
Raising FY27 guidance to $46.1–$46.4B.
3.2B AWUs in Q2 (+97% q/q)
6x growth in MCP… pic.twitter.com/dpzVdedk6C

— Marc Benioff (@Benioff) August 26, 2026

Robin Washington, president and chief financial and operating officer, said the order-value strength keeps the company on track for a second-half organic revenue pickup. Customer attrition was near its lowest level. Guggenheim analyst John DiFucci wrote that the report “went a long way in dispelling the SaaSpocalypse that CEO Marc Benioff has been fighting for the last 6 months or so,” while still warning that AI presents “material risk to many names.”

IGV Is Barely Above Water for the Year

The iShares Expanded Tech-Software Sector ETF, which holds 106 names and about $15.43 billion in assets, closed Friday at $109.50. BlackRock’s fund page shows a year-to-date NAV total return of 4.23 percent as of August 27. Market-price tallies around 3.6% as of August 28. Either way, that is a crawl, not a new bull market.

The path explains the gap. Barchart’s series puts the April 10 low at $73.93 and the one-month gain through August 28 at about 19%. MacroMicro has the fund up 6.88% in the week through August 28 and 15.78% over one month. A year ago the same fund was still barely ahead, with a 12-month total return near 1.3%. The S&P 500 Software & Services index had fallen more than 33% from its October 2025 peak to April 2026, according to Reuters figures cited by Investing.com. Last week’s tape filled in a hole. It did not rewrite 2026.

LAST WEEK’S PRINTS VERSUS THE BASKET

Workday, reporting Thursday after the close for the same July 31 quarter, posted total revenue of $2.649 billion, up 12.8%, and subscription revenue of $2.471 billion. Non-GAAP operating margin reached 31.1%. Management lifted fiscal 2027 subscription guidance to $9.940 billion to $9.950 billion, growth of 13%, and raised the non-GAAP margin target to 31.0%. On the call it said AI products brought in more than $100 million of new annual contract value, over a quarter of new business, and that AI recurring revenue is near $600 million, up from $500 million the prior quarter.

ServiceNow’s own AI annual contract value had already crossed $1 billion in its calendar second quarter, reported in July, with current remaining performance obligation of $13.2 billion, up about 21%. Those shares joined the Thursday bid even without a fresh print. TipRanks noted that over the same week the iShares Semiconductor ETF gave up about 2.2% while IGV added almost 6%.

Who Gets Paid When Agents Need a Home

The seat scare treated software as one trade. The prints split it. Salesforce’s Data 360 ingested 104 trillion records in the quarter, up 355%, including 82 trillion through Zero Copy. That is the system of record argument in a usage number: agents need customer data, rules, and a conversation history, and the vendor that already stores them can charge for the layer on top.

Nicholas Frasse, product manager for thematic ETFs at VanEck, told MarketWatch that “I don’t think all SaaS companies are created equal.” He pointed to “entrenched businesses like Salesforce that own a very proprietary set of data,” which makes them “a much bigger benefactor of the technology.” ServiceNow has been cast the same way, as a hard-to-copy store of workflow and customer data. Workday’s AI attach rate, at more than 25% of new annual contract value, is the HR and finance version of that attach story.

Michael Monaghan, partner and portfolio manager at Founder ETFs, told MarketWatch he was not surprised. Back in March, during the heaviest stretch of the software selloff, he argued the group would print a strong second half. “The concept that AI was going to vibe-code away packaged software … probably wasn’t viable,” he said, calling the Salesforce report “one of the first validations of that.”

Premium bundles are doing work the old seat count cannot. Salesforce said customers are moving into Agentforce One Edition and Agentforce for Apps. That is a price and mix story as much as a volume story. If agents take tasks off humans, the account can still grow if the remaining seats sit on a more expensive SKU and the agent usage is billed on top. Companies without a data layer to land those agents on do not get that mix shift. They just get the seat debate.

CrowdStrike Called This Its Best Quarter

CrowdStrike reported the same Wednesday night and took the other winning slot: the vendor that sells protection as enterprises stand up agents. Founder and CEO George Kurtz said in the release that “Q2 was the best quarter in CrowdStrike’s history.” Total revenue was $1.47 billion, up 26% from $1.17 billion a year earlier, and subscription revenue was $1.40 billion, up 27%.

The company delivered record net new ARR of $333 million, up 51%, and ending annual recurring revenue of $5.84 billion, up 25%. Accounts on Falcon Flex carried more than $2.29 billion of that, up 101%. Customers that convert from a standard subscription to Flex have seen average ending ARR rise more than 40%, the company said, and it raised fiscal 2027 net new ARR growth guidance by 630 basis points to 34% at the midpoint, or $1.350 billion to $1.359 billion.

Kurtz tied the print to Anthropic’s Mythos model, which security teams have treated as a turning point for AI-written exploits. “The Mythos moment translated into mass-market acceptance that AI adoption needs security, and that’s CrowdStrike,” he said. “Every enterprise will run on AI, and securing it is the largest market opportunity in our history.” CNBC put the stock up more than 61% this year even before this week. Free cash flow in the quarter was $377 million, and cash ended at $5.01 billion.

Okta also beat and raised the same night, another identity and access name pulled by agent deployments. Security and the system of record are collecting on the same spend wave. Generic workflow tools are not automatically on that list.

Hedge Funds Still Have a Software Hole to Fill

The earnings gave funds a reason to buy. The positioning gave them a need to. Jordan Klein, a desk-based analyst at Mizuho, wrote Friday that the rush into software has “much more to do with positioning among institutional investors than anything particularly new in the core fundamentals.” A lot of hedge funds and long-only growth managers have owned less software than the sector’s weight in the broader market, he said, in part because the group became a “funding short” that helped pay for larger bets on semiconductors and AI hardware.

That underweight, Klein argued, can keep software names climbing through September and October. He expects Salesforce to move higher into Dreamforce, and he also said he would not “chase” the stock at these prices, preferring ServiceNow and Microsoft. Earlier relief rallies this year often arrived when chip stocks sold off and money rotated. This tape can last longer if the underweight is real. It can also fade the moment that short cover is done.

WHERE ANALYSTS DISAGREE

• Michael Monaghan, Founder ETFs: The March selloff already pointed to a strong second half, and the Salesforce print is an early check on that call, with vibe-coding a weak replacement for packaged software.
• Jordan Klein, Mizuho: The bid is a positioning unwind more than a new fundamental regime, useful into September and October, but Salesforce is not a chase at the post-print price.
• Nicholas Frasse, VanEck: Buying and selling the whole category is the old mistake; the tape is now sorting names by whether the business owns data that agents have to land on.

Frasse’s version is the one the week actually printed. Salesforce, CrowdStrike, Workday, and ServiceNow moved as specific business models. The fund is a blender. A 4% year-to-date gain on 106 stocks is what a blender looks like after four names have a good week.

Dreamforce Opens in San Francisco on Sept. 15

Salesforce now has a calendar date attached to Klein’s window. The company will hold Investor Day with Dreamforce on Wednesday, September 16, at 1:00 p.m. Pacific at the St. Regis in San Francisco, and it has a product-adoption webinar on Tuesday, September 1. The conference itself runs September 15 to 17 at Moscone Center, with a Salesforce+ broadcast alongside it. A full conference pass is $2,299, or $999 each for groups of three or more.

That is two weeks for the stock to digest a 22.6% day and for funds still light the sector to decide whether they want to show up into a customer event. The $25 billion accelerated share repurchase is scheduled for a final settlement in October, which is the other date Klein’s window points at. Third-quarter revenue guidance is $11.42 billion to $11.50 billion, with current remaining performance obligation growth of about 14%, and that cRPO guide does not include Contentful or Fin.

THE DATES ATTACHED TO THIS TAPE

1. August 26, 2026: Salesforce and CrowdStrike report after the close; Salesforce then jumps 22.6% in Thursday’s session.
2. August 27, 2026: Workday reports subscription revenue of $2.471 billion and points to AI recurring revenue near $600 million.
3. September 1, 2026: Salesforce holds its Q2 product adoption and momentum webinar.
4. September 15-17, 2026: Dreamforce at Moscone Center; Investor Day is September 16 at the St. Regis.
5. October 2026: Final settlement of Salesforce’s $25 billion accelerated buyback, inside the window Klein sketched for the positioning unwind.

A customer event is where Salesforce has to show Agentforce in production, not in a slide. The U.S. Army expansion, which the company said could run up to 55 million Agentforce conversations a month, is the kind of proof point funds will want repeated on stage. So is the claim that attrition is near its low.

A Weekend Build Still Dies on Security

The other half of the week never got a 22% bid. Intuit fell 12% on Wednesday, to about $316, after cautious guidance, and 24/7 Wall St. put the stock down 46% year to date through Tuesday, dragging Adobe and even ServiceNow for a session before the Salesforce print reversed the sector. Design software had already spent 2026 under the same AI cloud. Those are the names the seat-and-rebuild thesis still fits more cleanly: tools a model can imitate, with less of a locked customer graph underneath.

A weekend-built CRM is the folk version of that thesis, and it keeps failing in the same place. Teams spin up a tool with coding assistants, then hit access control, account security, and a protected data store, and they go back to a platform that already has those pieces. That is why Salesforce can grow seats in Sales, Service, and Slack at the same time agents scale. It is also why the rebuild risk is still live in vertical software, where a workflow is narrow enough to copy and the data store is thin enough to leave.

Benioff’s line on the post was that every AI agent needs somewhere to land. The week sorted the industry by who already owns that landing strip and who is still arguing about seats.

WHAT THE BOUNCE HAS NOT SETTLED

• Outcome pricing: Benioff is pushing usage and results-based bills, and nobody on the buy side has agreed what an agent should cost.
• The EPS mix: The $5.90 non-GAAP print had help from investment gains, so the quality of the beat is still a live argument.
• The guide composition: $200 million of the Salesforce raise is pending deals, not organic demand.
• The cover: If Klein is right, the bid fades when underweight funds finish buying, which he still puts as late as October.

Investor Day is September 16 at the St. Regis, two weeks after the session that reopened the trade. Until then the software fund can look healthy on a one-month chart and still be only a few points above water for the year.

Disclaimer: This article is news reporting and analysis of publicly reported earnings, fund performance, and analyst commentary, and it is for information only. It is not investment advice, a recommendation to buy or sell any stock or exchange-traded fund, or a forecast of returns. Readers should consult a licensed financial adviser or broker who understands their own holdings, time horizon, and risk limits before acting on any of the names or funds mentioned. Share prices, remaining performance obligation figures, guidance ranges, and fund returns reflect the sources as of August 31, 2026, and will change with later trading, restatements, and company updates.