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Artificial intelligence (AI) has been one of the most transformative technological advancements in recent years, and its impact on businesses continues to expand. While generative AI chatbots like ChatGPT have dominated headlines, many experts believe the next big leap in AI will come from AI agents - autonomous systems capable of performing complex tasks, making decisions, and interacting with software and users in a far more advanced and context-aware manner.
According to Grand View Research, this is among the fastest-growing markets in terms of potential expansion. The global AI agents market is projected to grow at a compound annual growth rate (CAGR) of 45.8% from 2025 to 2030, reaching a total addressable market (TAM) of approximately $51.8 billion. However, this could be a significant underestimation, as a study by Markets.us projects the TAM to reach around $139.12 billion by 2033. This represents a tremendous opportunity for pioneering companies.
Among the publicly traded companies leading the AI agent revolution, three stand out: Adobe (ADBE), Salesforce (CRM), and ServiceNow (NOW). With that, let’s take a deep dive into how these companies are positioned to capitalize on the rise of AI agents, the role these intelligent systems will play in reshaping industries, and why investors may want to consider adding ADBE, CRM, and NOW to their portfolios sooner rather than later.
AI Stock Stock #1: Adobe
Adobe (ADBE), with a market cap of $197.9 billion, is the company behind several well-known products, including Photoshop, Illustrator, and Acrobat. ADBE ranks among the world’s largest software companies and serves creative professionals such as photographers, video editors, graphic designers, marketers, and others. The company operates through three main segments: Digital Media, Digital Experience, and Publishing and Advertising. It has also integrated AI technologies across its product lines, including the Adobe Firefly AI models, which enhance creative and productivity capabilities.
Shares of the creative software maker have remained flat year-to-date, slipping just 0.1%.
ADBE’s Agentic AI Potential
Adobe has been making significant investments in AI. The company’s AI agents are set to assist businesses in marketing and creative services. Its Firefly offering is a suite of generative AI models designed to enhance creativity and streamline workflows in Adobe products, providing customers with a creative co-pilot to accelerate ideation, exploration, and production. During the latest earnings call, CEO Shantanu Narayen stated that Firefly’s deep integration into its flagship applications within Creative Cloud, Document Cloud, and Experience Cloud was driving record customer adoption and usage. Notably, the company recently launched the new Firefly application, a destination to generate images, vectors, and now videos with the Firefly Video Model in a public beta.
Meanwhile, Adobe’s Acrobat AI features enable customers to extract key information from lengthy PDF documents, saving time and simplifying complex content. These features automate information extraction, accelerating the process and enabling customers to focus on analysis and decision-making. With that, Acrobat holds a robust position in document management.
How Did Adobe Perform in Q4?
Adobe reported its financial results for the fourth quarter of fiscal 2024 on Dec. 11. Its quarterly revenue was $5.61 billion, up 11.1% year-over-year and beating Wall Street estimates by $70 million. The top-line growth was mainly fueled by strong performance in the Digital Media segment. ADBE posted adjusted EPS of $4.81, topping expectations by $0.14.
Meanwhile, Adobe continues to see strong underlying demand, with its remaining performance obligations (RPO) reaching $19.96 billion, reflecting a 16% year-over-year growth in constant currency. During the earnings call, Adobe’s management stated that Q4 was the largest quarter for new bookings in the company’s history.
It is also important to note that Digital Media Annualized Recurring Revenue (ARR), a key measure of new subscription revenue, reached a record $578 million, ending the year at $17.3 billion. Another key highlight is the company’s surging cash flow. ADBE generated a record operating cash flow of $2.92 billion in Q4. It has also been actively repurchasing stock, buying back approximately 4.6 million shares during the quarter.
Despite ending the year strongly, ADBE’s stock plunged over 13% in the following trading session after the company issued softer-than-expected full-year guidance. Management anticipates FY25 revenues to range between $23.30 billion and $23.55 billion, with adjusted EPS projected to be between $20.20 and $20.50. Both figures missed Wall Street consensus estimates.
ADBE Valuation and Analysts’ Estimates
Analysts tracking the company foresee a 10.78% year-over-year increase in adjusted EPS to $20.41 for fiscal 2025, with revenue expected to advance 9.38% from the previous year to $23.52 billion.
In terms of valuation, ADBE stock appears highly attractive. Priced at 22.28 times forward adjusted earnings, the stock trades at a discount to both the sector median of 25.32x and its five-year average of 34.66x, indicating a relative bargain in a market where valuations remain elevated due to the GenAI boom. Notably, this also positions ADBE as the most affordable stock among its peers.
What Do Analysts Expect for ADBE Stock?
Wall Street analysts have a consensus rating of “Moderate Buy” on Adobe stock, with a mean target price of $573.64, which indicates upside potential of 29%. Among the 34 analysts covering the stock, 21 recommend a “Strong Buy,” one rates it as a “Moderate Buy,” 10 suggest holding, one advises a “Moderate Sell,” and one gives a “Strong Sell” rating.
AI Stock #2: Salesforce
Salesforce (CRM) is a dominant player in the cloud-based customer relationship management (CRM) software market. The company assists businesses in improving their customer service experience by streamlining sales and customer engagement processes. Its market cap currently stands at $304.7 billion.
Shares of the cloud computing software giant have fallen 7.8% year-to-date.
CRM’s Agentic AI Potential
Salesforce’s AI agents are designed to help businesses with sales and customer retention. In September 2024, CRM introduced Agentforce, a suite of autonomous AI agents designed to assist with tasks in service, sales, marketing, and commerce, thereby increasing efficiency and customer satisfaction. Agentforce went into production in the final week of the third quarter, and management reported securing 200 clients within that week alone, with “thousands more in the pipeline,” highlighting its early success. As of December 2024, Agentforce has reportedly secured over 1,000 paid deals. Notably, the company intends to deploy Agentforce on a large scale. It plans to deploy 1 billion agents using Agentforce by the end of 2025, enabling organizations to easily build, customize, and deploy their own agents for various use cases across all industries. Since Agentforce was launched recently, its full impact remains to be seen. Piper Sandler has indicated that Agentforce is likely to become a significant revenue driver only after fiscal 2027 (calendar year 2026).
Meanwhile, Salesforce announced in late 2024 that it plans to launch the enhanced Agentforce 2.0 in February 2025. Some features of Agentforce 2.0 have been released over the past few weeks, yet the full launch has not yet occurred. With that, this could act as a significant catalyst for the stock, similar to the boost it experienced when the initial version of Agentforce was unveiled in mid-September 2024.
Salesforce also offers Einstein AI, which has been available for many years and was the first comprehensive AI solution for CRM. It is a comprehensive suite of AI technologies that enhances the intelligence of the Customer Success Platform and brings AI capabilities to trailblazers everywhere.
Recent News for CRM Stock
On Feb. 19, Redburn Atlantic analyst Omar Sheikh initiated coverage of Salesforce with a “Buy” rating and a price target of $400.
On Feb. 4, Bloomberg reported that Salesforce plans to lay off more than 1,000 employees as part of its restructuring efforts, while simultaneously hiring for positions to sell new AI products. The job cuts highlight the company’s strategic pivot toward AI-driven solutions, especially in the wake of Agentforce’s success. As a result, these internal efficiency initiatives are highly likely to boost value for CRM shareholders.
Salesforce Surges Despite Mixed Q3 Results as Agentforce Gains Ground
On Dec. 4, CRM stock climbed about 11% despite delivering mixed results and guidance, as investors responded positively to CEO Marc Benioff’s remarks about Agentforce.
Benioff stated that the cloud computing giant had “the droids you are looking for.” “Agentforce, our complete AI system for enterprises built into the Salesforce Platform, is at the heart of a groundbreaking transformation,” he noted. “The rise of autonomous AI agents is revolutionizing global labor, reshaping how industries operate and scale. With Agentforce, we’re not just witnessing the future - we’re leading it, unleashing a new era of digital labor for every business and every industry.” As mentioned earlier, Benioff emphasized that the company secured over 200 deals within the first week of Agentforce’s general availability, which particularly impressed Wall Street regarding its future potential.
In the most recent quarter, Salesforce reported an 8.3% year-over-year increase in revenue to $9.44 billion, fueled by a rise in subscription and support revenues due to volume-driven gains from new business. More precisely, the company experienced strong new business growth in Latin America, Canada, and Australia. The top-line figure surpassed the Wall Street consensus by $90 million. At the same time, CRM’s adjusted EPS came in at $2.41, missing expectations by $0.04. This was the first earnings miss in several years.
Investors also welcomed 30% year-over-year growth in free cash flow to $1.78 billion, signaling the likely continuation of the company’s shareholder-friendly policy. Notably, in the latest quarter, Salesforce allocated $1.6 billion to dividends and share repurchases. CRM offers an annualized dividend of $1.60 per share, resulting in a forward yield of 0.52%.
Meanwhile, the company’s current RPO returned to double-digit growth, rising slightly more than 10% year-over-year to $26.4 billion. cRPO outperformance was driven by favorable early renewals and robust new bookings. Also, its adjusted operating margins were strong, reaching 33.1%.
Looking ahead, management has guided FY25 revenue to range between $37.8 billion and $38 billion, representing an approximate annual growth of nearly 10%. Also, full-year adjusted EPS is projected to range from $9.98 to $10.03. The guidance failed to impress as the midpoint of the revenue forecast was only slightly above consensus estimates, while the midpoint of the adjusted EPS forecast fell below consensus estimates.
CRM Valuation and Analysts’ Estimates
According to Wall Street estimates, CRM is expected to post 21.97% year-over-year adjusted EPS growth to $10.03 in FY25. Moreover, analysts project an 8.89% year-over-year increase in the company’s revenue to $37.96 billion.
In terms of valuation, CRM’s forward P/E ratio (Non-GAAP) stands at 30.90x, which exceeds the sector median of 24.30x yet remains below its five-year average of 42.43x. This multiple is not high for the market leader in the niche of customer relationship management software. Salesforce is expected to achieve significant profit growth as it scales its CRM platform and launches new AI tools, suggesting that the stock may be potentially undervalued.
What Do Analysts Expect for CRM Stock?
Salesforce stock has a consensus “Strong Buy” rating. Out of the 46 analysts providing recommendations for the stock, 34 rate it as a “Strong Buy,” three advise a “Moderate Buy,” seven give a “Hold” rating, and two consider it a “Strong Sell.” The mean price target for CRM stock is $397.16, which is 28% above its current price.
AI Stock #3: ServiceNow
Valued at a market cap of $193.3 billion, ServiceNow (NOW) is an enterprise technology company that helps customers develop digital workflows. These workflows facilitate automation, enhance employee productivity, and boost customer satisfaction. The company caters to a wide range of industries, including government, financial services, healthcare, technology, and telecommunications.
Shares of the cloud software giant have dropped 12.5% on a year-to-date basis.
NOW’s Agentic AI Potential
ServiceNow continues to expand its AI portfolio, consistently introducing new AI offerings. Notably, the company is enhancing its position in Agentic AI with the recent launch of its new Agent Orchestrator, and its upcoming AI Agent Studio set to debut in March 2025. NOW’s AI agents are created to assist businesses in customer service.
The company’s new AI Agent Orchestrator enables teams of specialized AI agents to work together across tasks, systems, and departments to accomplish a specific goal. NOW also recently unveiled thousands of pre-built agents for IT, customer service, HR, and other areas. In addition, the AI Agent Studio, set to be available early this spring as part of ServiceNow’s Pro Plus and Enterprise Plus offerings, will allow customers to create customized AI agents, thereby speeding up AI adoption and productivity improvements across enterprises.
Meanwhile, the company experienced a 150% quarter-over-quarter increase in deals for its Pro Plus Now Assist AI product within the IT Service Management, Customer Service Management, and Human Resource Service Delivery solutions. Additionally, the number of customers purchasing two or more genAI capabilities doubled from the previous quarter. With that, their AI solutions are crucial for leveraging the growing demand for improved workflow automation and cost efficiencies within organizations.
How Did ServiceNow Perform in Q4?
ServiceNow reported its fourth-quarter earnings results on Jan. 29. Its quarterly subscription revenues came in at $2.87 billion, up 21% year-over-year, surpassing the high end of its guidance by 50 basis points. The company’s total revenue grew 21.3% year-over-year to $2.96 billion, in line with expectations. Enterprise tech is renowned for its recurring revenue model but NOW stands out with an exceptional 98% renewal rate. This underscores the consistent trust and value that customers place in the Now platform.
One critical metric for investors to monitor is the growth in RPO, as it provides insight into revenue visibility. In Q4, RPO grew 23% year-over-year to $22.3 billion, and cRPO, contract revenue that will be recognized as revenue in the next 12 months, rose 19% year-over-year to $10.3 billion. This indicates that revenue growth of around 20% is likely to continue moving forward.
On the profitability front, NOW posted a non-GAAP operating margin of 29.5%, driven by OpEx efficiencies and its top-line outperformance. The company’s adjusted EPS stood at $3.67, beating expectations by $0.01.
Meanwhile, ServiceNow serves over 8,400 global customers, including 85% of Fortune 500 companies that utilize its software. The company now boasts 2,109 customers with over $1 million in annual contract value (ACV), a 12% year-over-year increase, and nearly 500 customers with over $5 million in ACV, representing 21% year-over-year growth.
NOW ended the year with a strong balance sheet, holding $10 billion in cash and investments, and generated a robust total free cash flow of $3.5 billion for 2024. This strong generation of free cash flow demonstrates the company’s ability to invest in growth initiatives and return capital to shareholders aggressively. In fact, the company repurchased approximately 293,000 shares during Q4. Moreover, its Board of Directors authorized the purchase of up to an additional $3 billion in common stock.
However, NOW stock fell more than 11% after the company issued lackluster guidance for both the quarter in progress and FY25. Management projects Q1 subscription revenue at $3 billion, with full-year subscription revenue guidance set between $12.64 billion and $12.68 billion. While the Q1 forecast slightly missed consensus estimates, the full-year projection fell significantly short, triggering the post-earnings selloff.
NOW Valuation and Analysts’ Estimates
Analysts tracking the company predict a 17.83% year-over-year increase in its adjusted EPS to $16.40 for fiscal 2025. Also, Wall Street expects NOW’s total revenue to grow 18.77% year-over-year to $13.05 billion.
Going forward, valuation remains a major concern for NOW. The stock is currently trading at 57.22x non-GAAP forward earnings, representing a 135.41% premium over the sector median. However, it’s important to note that the company’s fundamentals and potential growth trajectory remain exceptionally strong. Moreover, many top-performing stocks over the past few decades have been viewed as overvalued for most of their existence. This is why I believe NOW’s valuation is more than reasonable at current levels.
What Do Analysts Expect for NOW Stock?
Wall Street analysts have deemed NOW stock a “Strong Buy,” with an average target price of $1,153.19, suggesting upside potential of 22.9%. Among the 38 analysts covering the stock, 30 recommend a “Strong Buy,” three advise a “Moderate Buy,” four suggest holding, and one gives a “Strong Sell” rating.
