Salesforce (CRM) falls 9.9% following landmark US Army AI contract and EMBERPOINT role – has the bull case changed?

• In late January 2026, Salesforce announced a $5.6 billion, 10-year IDIQ contract with the U.S. Army, joining EMBERPOINT LLC alongside Lockheed Martin, PG&E, and Wells Fargo to provide AI-enabled data, cloud, and coordination tools for defense and wildfire mitigation.
• These moves highlight how Salesforce is positioning its Agentforce and data platform at the core of mission-critical government and public safety systems, even as software companies face growing questions about their AI-related business models.
• Next, we explore how this major U.S. Army contract and Salesforce’s focus on AI could reshape the company’s long-term investment story.

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What is the Salesforce investment story?

To continue using Salesforce after a 40% decline in gross profit in one year, you must trust that the core Customer 360, Data 360, and Agentforce stacks will remain at the center of sales, service, and operations for large organizations, even as AI agents change the way software is purchased and priced. The $5.6 billion, 10-year U.S. Army IDIQ contract and EMBERPOINT’s wildfire venture lend real-world support to this theory, firmly entrenching Salesforce in long-term mission-critical workloads at a time when investors are questioning the durability of subscription models. However, in the short term, the key catalysts remain on the February 25th earnings release, updated AI monetization details, and any color on renewals and seat counts, with risks centered on AI pressure on per-seat pricing, leadership changes in acquired clouds, and whether recent AI wins meaningfully offset sector-wide multiplex compression.

However, one risk regarding the impact of AI on Salesforce’s sheet-based pricing power deserves more attention.

Despite the pullback, Salesforce stock may still be trading 42% above its fair value. Discover the potential downside here.

explore other perspectives

Across the 42 views on the Simply Wall St Community, fair value estimates range from approximately US$242 to US$435 per share, reflecting the wide variation in expectations for Salesforce’s AI transition. The spread comes as a new US$5.6 billion Army contract could influence how investors think about long-term demand resilience and short-term concerns about AI squeezing subscription revenue. You can compare these community views with changes in risk regarding AI agents, profit margins, and corporate budgets.

Explore 42 other fair value estimates on Salesforce – Find out why the stock is worth more than twice its current price.

Build your own Salesforce narrative

Don’t agree with this assessment? Create your own story in under 3 minutes. Following the herd rarely yields exceptional investment returns.

• A great starting point for Salesforce research is an analysis that reveals four key benefits that can influence your investment decision.
• Our free Salesforce research report provides comprehensive fundamental analysis compiled into a single visual (Snowflake), making it easy to assess Salesforce’s overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary using only unbiased methodologies, based on historical data and analyst forecasts, and articles are not intended to be financial advice. This is not a recommendation to buy or sell any stock, and does not take into account your objectives or financial situation. We aim to provide long-term, focused analysis based on fundamental data. Note that our analysis may not factor in the latest announcements or qualitative material from price-sensitive companies. Simply Wall St has no position in any stocks mentioned.

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