Salesforce (CRM) will report its Q3 earnings on Tuesday, with some analysts focusing on preliminary guidance for fiscal 2026. The company’s stock has advanced 26% in 2025, largely driven by the release of a new artificial intelligence product roadmap in September.
Industry-wide, software stocks like Snowflake (SNOW) and Microsoft (MSFT) have seen strong gains this year, with the iShares Expanded Tech-Software Sector ETF (IGV) up 29% in 2024. However, some analysts, such as Brian White at Monness, Crespi, Hardt & Co., warn that the software complex has faced challenges in 2024 and expect incremental activity over the next 12 to 18 months.
Salesforce is a notable player in the AI space, with its recent pivot to autonomous AI agents. The company’s new innovations, such as Agentforce, have generated excitement among investors. However, analysts like Morgan Stanley’s Keith Weiss caution that balancing investments in growth opportunities with efficiency initiatives may impact profit margin expansion.
Analysts project revenue growth of 9% and EPS growth of 10% for fiscal 2026, driven by the success of Agentforce. JPMorgan analyst Mark Murphy has praised the product as generating real customer excitement, but notes that it may not significantly impact revenue growth in the short term.
For Q3, analysts expect adjusted EPS to rise 16%, with revenue growing 7%. The company’s current remaining performance obligations are expected to increase by 9% to $26.1 billion. With CEO Marc Benioff set to discuss management changes and Salesforce President Brian Millham’s retention agreement coming up for renewal in March 2025, investors will be keenly watching these developments.
Salesforce stock holds an IBD Composite Rating of 96 out of a best-possible 99, indicating strong growth potential. The company’s Accumulation/Distribution Rating is B, suggesting institutional buying and selling activity.
Source: https://www.investors.com/news/technology/salesforce-stock-salesforce-earnings-q32024