BNP highlights bullish takeaways on agentic AI, growth in meetings with Salesforce, Workday, Snowflake
View original at seekingalpha.comBNP highlights bullish takeaways on agentic AI, growth in meetings with Salesforce, Workday, Snowflake [Humans are using laptops and computers to interact with AI, helping them create, code, train AI, or analyze big data with fast, cutting-edge technology.] BNP Paribas highlighted key takeaways, including agentic AI, g…
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Flex Credit revenues expected to start ramping up in fiscal year 2027 for new agentic offerings on outcome-based pricing
60% confidenceAI native revenue is likely less than 2% but may have already helped drive Q4 beat
60% confidenceWorkday's integrated data model across HCM and Finance provides advantage as it increasingly sells the full suite
60% confidenceLLM companies like Anthropic and OpenAI appear more focused on disrupting the applications market rather than entering the data platform market
60% confidenceCustomers finding value in using Snowflake's own coding tool for data operations because it better identifies patterns and context within Snowflake data while benefiting from Snowflake security and governance
60% confidenceSalesforce is doing all of the right things, but the share price will not likely react until Salesforce can demonstrate stability in its core business and demonstrate continued success and adoption of Agentforce along with Data Cloud
60% confidenceCompanies are returning to Salesforce after testing solutions from AI startups like Sierra AI and Decagon AI, and after trying DIY AI using OpenAI and Anthropic LLMs
60% confidenceWorkday prices initial contracts based on customer employee base size with three-year minimum commitment, with renewals reflecting business growth, CPI inflation, and new functionality
60% confidence27 years of operational CRM data embedded within systems of record provides advantage versus new competitors
60% confidenceCompetition from Databricks is not new and competitive fears appear to have died down from their peak a couple of years ago
60% confidenceLLM costs will weigh on gross margins, but Salesforce can secure volume discounts and expects costs per token to come down over time
60% confidenceSalesforce is well-positioned to win in the new agentic layer due to customer data context, existing systems of work, Atlas Reasoning Engine for workflow orchestration, and engagement layer through Slack
60% confidenceData Cloud offering expected to ramp up in second half, charged on consumption basis based on amount of data
60% confidenceSnowflake is a key beneficiary of AI, as AI can help drive acceleration in demand for core platform and provides opportunities to extend use cases and reach through development simplification
60% confidenceNew customer growth is slower as some industries have slowed, including SLED, Healthcare, and parts of retail
60% confidenceFlex Credit revenues are expected to start ramping up in fiscal year 2027 for new agentic offerings, which will be outcome-based
60% confidenceRevenue growth acceleration should be visible in H2, potentially as early as Q3
60% confidenceSalesforce's marketing business will stabilize with new product functionality ramping, but Commerce is taking longer to demonstrate improvements due to competitive pressures and competing for R&D resources with AI areas
60% confidenceLLM costs will weigh on gross margins, but Salesforce can secure volume discounts and expects costs per token to decline over time
60% confidenceMarketing business will stabilize with new product functionality ramping, but Commerce taking longer to improve due to competitive pressures and R&D resource allocation to AI
60% confidenceRevenue growth acceleration expected in H2, potentially as early as Q3
60% confidenceMargin targets may be lowered as company focuses on accelerating top-line growth and ensuring product portfolio relevance in agentic AI world
60% confidenceSome customers already replacing third-party point solution functionality by running workflows directly in Snowflake
60% confidenceIntegrated data model across HCM and Finance provides advantage as company increasingly sells the full suite
60% confidenceCompetition from Databricks is not new, and competitive fears appear to have died down from their peak a couple of years ago
60% confidenceCompany has not seen any mass piping of data out of Salesforce to date
60% confidenceFlex Credit revenues expected to start ramping in fiscal year 2027 for new agentic offerings on outcome-based pricing
60% confidenceIntegrated data model across HCM and Finance provides advantage as company increasingly sells full suite
60% confidenceAI provides opportunity to increase accessibility of technologies to more business users beyond just business and data analysts through tools like Cortex Code
60% confidenceLLM costs will weigh on gross margins, but Salesforce can secure volume discounts and expects costs per token to come down over time
60% confidence
Data points we hold from this source
| Snowflake Inc. · gross margin target | 75 percent |