With just a few weeks left in the year, the technology sector is gearing up to compete again S&P500 (SNPINDEX: ^GSPC) largely thanks to the profits from it Nvidia And Broadcom in the semiconductor industry. The software industry is also a large part of the technology sector, but has seen mixed results this year. For example, Salesforce(NYSE: CRM) beats the S&P 500’s gains this year, but Microsoft And Adobe(NASDAQ: ADBE) walk behind. Adobe in particular is down more than 22% year-over-year at the time of this writing, severely underperforming the industry.
Here’s what Salesforce is doing right, why Adobe is out of favor, and whether both growth stocks are worth buying now.
Image source: Getty Images.
Not long ago, Salesforce was in the same boat as Adobe. Both companies missed out on the broader rally in the tech sector as investors questioned whether spending big money on artificial intelligence (AI) would pay off. However, as you can see from the chart, Salesforce has exploded higher in recent months, while Adobe is dangerously close to a 52-week low.
CRM data by YCharts
Salesforce has become a standout in the enterprise software space because it offers a compelling AI capability that will immediately contribute to revenue and profit growth. This opportunity is what Salesforce calls AI agents, which rely on machine learning and natural language processing to answer questions, solve problems and make decisions. Agentforce is the platform on which organizations can customize and build multiple AI agents.
On Salesforce’s Q3 2025 earnings call, the company mentioned the word “agent” a whopping 136 times. Typically, when a company places too much emphasis on a new product or service, it can be a signal that management is overpromising. However, given the share price rally, investors seem to think Agentforce could be the real deal.
Agentforce is perhaps Salesforce’s most important innovation in years, providing a clear path to immediately contributing high-margin revenue to Salesforce. The service, launched in October, is usage-based and costs $2 per call. As my colleague Geoffrey Seiler notes, this is a $2 billion opportunity based on Salesforce CEO Marc Benioff’s goal of 1 billion AI agents. For context, Salesforce expects revenue of approximately $38 billion in fiscal 2025.
If successful, Agentforce could accelerate growth and differentiate the company’s enterprise software suite, including Salesforce, Slack, Tableau and more. For now, however, Salesforce only expects revenue growth of 8% to 9% in fiscal 2025 compared to fiscal 2024.
In short, Salesforce may not be growing fast, but it does have an AI-powered growth story, which makes the stock intriguing for long-term investors.
Adobe just reported its fourth quarter and full fiscal year 2024 results, with revenue up 10.8% year over year in the period ended November 29. The company targets accelerated revenue growth of 14.2% in fiscal 2025 and non-GAAP (adjusted) earnings per share growth of 10.5%. And yet Adobe sold the session down more than 13% after reporting earnings.
Despite their similar near-term growth rates, investors are cheering Salesforce and have turned negative on Adobe. There is now a widespread belief that Salesforce’s AI-driven growth is the real deal, while there are doubts whether Adobe can effectively monetize AI.
Adobe has been developing many AI-powered product upgrades and just posted another record year of high-margin growth. However, it has yet to make the impressive announcement that Salesforce made with Agentforce.
The recent rise in Salesforce’s share price shows that investors are excited about AI-driven enterprise software solutions, while Adobe’s disappointment signals a lack of patience among companies that don’t have a clear roadmap to monetize AI. As an individual investor, you don’t need to get too involved in short-term price movements. Instead, it’s better to filter through the noise and determine whether a company has runway for future growth and whether the valuation makes sense.
Salesforce has had a big run-up, but there’s undeniable potential with Agentforce that could still make the stock a good buy now. Some investors may prefer to wait and see if Salesforce can deliver on its lofty goals before acting now.
Meanwhile, the sell-off at Adobe seems a bit exaggerated. The midpoint of Adobe’s non-GAAP earnings guidance for fiscal year 2025 is $20.35 per share, giving the company a price-to-earnings ratio of just 22.5. That’s dirt cheap for a leading high-margin cash cow that’s poised for solid growth in the coming year.
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Daniel Foelber has no position in any of the stocks mentioned. The Motley Fool holds positions in and recommends Adobe, Microsoft, Nvidia and Salesforce. The Motley Fool recommends Broadcom and recommends the following options: long January 2026 $395 calls to Microsoft and short January 2026 $405 calls to Microsoft. The Motley Fool has a disclosure policy.
Down 22%, here’s how Adobe could follow in Salesforce’s footsteps to become a strong buy in 2025. originally published by The Motley Fool
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