Salesforce's (CRM) fourth-quarter results are expected to reflect stable demand and artificial intelligence traction, but foreign currency fluctuations and a recent C-suite shuffle pose headwinds heading into fiscal 2026, Morgan Stanley said in a note.

Channel checks indicate that demand was likely stable in the fourth quarter, while the customer relationship management platform's autonomous artificial intelligence product, Agentforce, is generating increased interest, according to the note emailed Monday. However, Agentforce's larger deal deployments aren't expected to close until the second half of this year.

While management's fourth-quarter guidance assumes a $25 million currency headwind, equating to a 25-basis-point impact on revenue, Morgan Stanley now expects foreign exchange to hit the top line by more than 50 basis points.

Morgan Stanley forecasts revenue of $9.97 billion for the quarter, implying year-over-year growth of 7.3% but below the $10.05 billion growth projected by analysts on average. The brokerage's $2.60 earnings per share target is two cents lower than the Street's view. Salesforce will report its latest financials on Wednesday.

Shares of Salesforce have underperformed large-cap software peers over the past three months largely due to a C-suite shuffle announced earlier this month, Morgan Stanley said. The company named Robin Washington, a Salesforce board member since 2013, as chief operating and financial officer.

Current CFO Amy Weaver announced last year that she would be transitioning from Salesforce, which said in February that COO Brian Millham will retire.

"Heading into the (fourth-quarter) print, we believe it is fair to temper expectations," the brokerage wrote in its report. "With a new person starting shortly in the CFO seat, the company may take a prudent stance to setting targets for the coming fiscal year."

For fiscal 2025, Morgan Stanley expects Salesforce's revenue of $37.87 billion, which it said is below the consensus estimate. The brokerage projects sales of $41.11 billion for fiscal 2026, lower than the $41.37 billion consensus.

"While constructive on the opportunity in (generative AI,) we do not expect to hear about material topline impact to (fiscal 2026) given we are still in the very early days of adoption," according to the brokerage.