To The Moon

The software sector has been under immense pressure due to a "SaaS Apocalypse" narrative—the fear that generative AI will disrupt and displace traditional software business models. However, the latest financial results for $Snowflake(SNOW)$ and $Salesforce.com(CRM)$ (reporting Q4 FY2026 results at the end of February 2026) strongly indicate that their pivot to Agentic AI is not just marketing hype; it is actively landing in enterprise production and changing their operational realities.

Both companies are scheduled to report their next round of earnings on May 27, 2026, making this a critical moment to evaluate their trajectories.

Does the development so far validate their pivot?

Yes, the data validates the pivot. The market shifted heavily from speculative "AI pilots" to actual "operational deployment," and both companies are successfully capturing this transition.

Salesforce (Agentforce): The launch of Agentforce has been a massive success. Salesforce closed over 29,000 cumulative Agentforce deals within 15 months of launch, representing a massive 50% quarter-over-quarter (QoQ) growth in deal count. Furthermore, accounts with Agentforce in production increased nearly 50% sequentially.

Snowflake (Cortex AI & Snowflake Intelligence): Snowflake’s shift into data-native AI infrastructure is paying off. Approximately 9,100 accounts are now leveraging Snowflake AI features. Its specific agentic AI offering, Snowflake Intelligence, nearly doubled its footprint in a single quarter, scaling to 2,500 accounts within just three months of wide availability.

Business and Operational Benefits

The validation of Agentic AI has fundamentally shifted how these companies generate revenue and protect their moats.

Salesforce: The Shift to a Task-Based Economy

Traditionally, Salesforce grew by selling more user licenses ("seat-based" pricing). With AI automation threatening to reduce employee headcounts, Wall Street panicked. Salesforce adapted by introducing Agentic Work Units (AWUs)—monetizing the tasks completed by AI agents rather than human seats.

• Revenue Impact: Agentforce Annual Recurring Revenue (ARR) surged 169% year-over-year to $800 million.

• Cross-Selling: More than 60% of Agentforce and Data 360 bookings came from existing customer expansions.

• Operational Scale: Salesforce processed 771 million Agentic Work Units in Q4 FY26 alone, proving that enterprises are trusting AI to execute real-world workflows (like resolving customer service cases or managing supply chains) natively inside Salesforce.

Snowflake: Monetizing Heavy AI Workloads

Snowflake operates on a consumption model—customers pay for the compute and storage they use. Agentic AI requires massive, continuous querying of structured and unstructured enterprise data.

• Revenue Impact: Product revenue grew 30% year-over-year to $1.23 billion in their latest quarter, heavily driven by these expanding AI workloads.

• Enterprise Lock-in: Remaining Performance Obligations (RPO)—which represents contracted future revenue—accelerated 42% YoY to $9.77 billion. This shows that large enterprises (including 790 of the Forbes Global 2000) are committing long-term capital to treat Snowflake as their secure "AI Data Cloud."

Will we see significant growth in the upcoming earnings report?

For the upcoming May 27, 2026 earnings reports, expect solid structural health and margin expansion, but the true explosive revenue growth will likely be back-half loaded.

Here is the breakdown of what to look for based on their official company guidance and current structural dynamics:

Salesforce Outlook (Q1 FY2027)

• Guidance Set: Salesforce projected Q1 FY27 revenue of $11.03 billion to $11.08 billion and adjusted EPS of $3.11 to $3.13 (beating early Wall Street expectations).

• Growth Trajectory: Management explicitly stated they expect an organic revenue re-acceleration in the second half of fiscal 2027 (late 2026). Because enterprise agentic rollouts take a few quarters to fully scale from contract signature to high-volume "Agentic Work Unit" consumption, the financial numbers will show steady, disciplined growth this quarter rather than an immediate vertical spike.

• Profitability Moat: Backed by an adjusted operating margin of 34.1% and a massive $50 billion share repurchase authorization, Salesforce has an immense cushion of safety.

Technical Analysis - Support and Resistance

Ahead of its May 27 earnings report, Salesforce (CRM) is trading in a medium-term falling trend around $176.

• Support: Immediate horizontal and psychological support sits nearby between $160 and $170. A breach below $160 (analyst low targets) could accelerate selling.

• Resistance: Heavy overhead resistance rests at $187, followed by the 50-day moving average near $222.

With momentum indicators (RSI at 44–50) leaning neutral-to-oversold, the stock is coiled. A positive earnings surprise is required to break out above $187; otherwise, the downward trend targets the $160 floor.

Snowflake Outlook (Q1 FY2027)

• Guidance Set: Snowflake projected Q1 FY27 product revenue of $1.262 billion to $1.267 billion, maintaining a strong 27% year-over-year growth rate.

• The Consumption Paradox: Because Snowflake is consumption-based, its growth is tied directly to how much compute customers use. While AI demand is surging, enterprises are simultaneously optimizing their standard data queries to save costs. This balances out the immediate top-line spike.

• Margin Expansion: Snowflake's non-GAAP operating margin is projected to expand from 10.5% to 12.5% for the full year, indicating that the business is turning a corner toward much stronger profitability as AI tools scale.

Technical Analysis - Support and Resistance

Snowflake (SNOW) enters its May 27 earnings report trading near $172, attempting to break out of a prolonged medium-term downward trend.

• Support: Key structural support rests at $157, backed by a firmer psychological floor at $150 where recent accumulation occurred.

• Resistance: Direct overhead resistance is at $177 (recent monthly high). A successful breakout eyes $185 to $192, aligning with its 13-week highs.

Momentum indicators have turned bullish (RSI near 62), positioning SNOW above its 50-day moving average. With options pricing in a steep 12–13% implied move, earnings will determine if SNOW sustains this reversal.

Summary

The upcoming earnings will likely confirm that the "SaaS Doomsday" narrative was overblown. Look closely at RPO growth and Agentforce/Cortex customer adoption metrics in the reports.

While the immediate revenue growth for this specific quarter will be steady and in-line with the 10-12% (Salesforce) and 27% (Snowflake) targets, the compounding nature of task-based and consumption-based AI models sets both companies up for significant financial acceleration later this year.

Appreciate if you could share your thoughts in the comment section whether you think it would be a good time to start performing portfolio adjustment to include these SaaS stocks.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire @MillionaireTiger appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.