Salesforce (CRM) carries a $190 price target and a neutral rating, below where the stock trades now. The business shows mixed trends across its product lines heading into earnings next week.
Growth versus drag
On the positive side, Data 360 and Agentforce are growing. On the negative side, Tableau has been weak, largely because AI can spin up new analytic dashboards very easily, which undercuts the need for a separate analytics tool. Marketing and commerce have also been weak. Slack, Agentforce, and Data 360 are the bright spots that offset the weakness in marketing, commerce, and Tableau. Slack and Tableau were both acquisitions the company had to bring in.
Agentforce is growing well but is not yet big enough to move the needle for a company Salesforce's size. Agentforce is evolving out of earlier testing efforts into something that shows returns.
Guidance and the earnings setup
The company has messaged that organic growth should return in the second half, after this quarter. Investors will want to hear that net new annual order value is growing faster than annual order value, which could signal revenue acceleration in the back half.
Management raised the low end of fiscal year 2027 revenue guidance but is not expected to raise the top end. Lifting the bottom is not very meaningful, because investors expect Salesforce to land closer to the top end than the low end; the low end is an easy bar to clear.
This quarter will not bring substantial revenue acceleration. Any acceleration would come in the back half, driven partly by sales hiring and partly by the weaker businesses shrinking as a share of the mix. By the time you reach Q4, the Informatica acquisition will have annualized, and some expectations out there look pretty high. There is a good chance Salesforce will not raise the high end of its full year guidance in this report, which could disappoint.
A little acceleration in current RPO (remaining performance obligation, a tracked backlog metric) and about a half point of acceleration in overall revenue might be good enough for investors. The stock has traded well over the last two months, which creates a tougher setup than it would have had otherwise.
What to watch and the AI shift
The main thing to watch is the conversion from per-seat licensing to a token-based economy. So far the signs are good that Salesforce can convert and avoid the trauma of the so-called SaaS apocalypse. Other points of interest: as many specifics as possible on Agentforce, and the adoption of Slackbot among customers already using Slack. Drilling into Slackbot gives a step-by-step measurement of how people work, and that kind of information is critical to getting positive returns on AI investment.
Salesforce (CRM) manages very important data for many users, which is a longer-term value proposition. The company is not spending hundreds of billions of dollars building out hardware, so it stays out of that fight, making it a relatively safe, slow-growth opportunity in the AI space.
Acquisitions will continue, but for now the company is digesting Informatica before doing another large deal. Expect more AI-focused acquisitions. The "headless Salesforce" move opens the platform to provide data to third-party agents and to monetize that access, marking a shift in AI strategy that will keep evolving beyond Agentforce alone.
Stock levels
The stock has come up from lows of $146 and trades around $200 and change. Over one year it is down about 16%. Some saw a favorable earnings setup with slow momentum pointed in the right direction.
