Salesforce (CRM) has tested investors’ patience this year. Shares are down about 31% from their 52-week high of $369 and remain roughly flat year-over-year, trailing the S&P 500’s ~14% gain. Sentiment has weakened amid concerns over decelerating growth, renewed M&A chatter, and uncertainty about when AI will have a meaningful impact on results.
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As the market focuses on Salesforce’s earnings figures, due after tomorrow’s market close, current shareholders are buoyed by strong financial results, several strategic acquisitions, and significant growth in key areas like AgentForce and Data Cloud. However, challenges remain in the form of marketing and commercial segments, as well as potential delays in the company’s highly acclaimed Informatica (INFA) acquisition.
Even so, the company’s core operations remain solid, and Q2 FY26 appears well-positioned. I expect a steady report, with fundamentals likely to calm investor nerves rather than exacerbate them. With earnings power still compounding and the stock trading at a reasonable multiple, I continue to view CRM as a Bullish opportunity.
CRM Feels the Pressure
First, Salesforce’s FY26 guide has dampened sentiment, with projected revenue growth of just 8%–9%. After years of double-digit compounding, the market views this slowdown as a psychological setback. When management emphasizes a “34% adjusted operating margin” and “disciplined growth,” skeptics often hear a “mature software story,” which can drive multiple compression. That dynamic has weighed on large-cap software throughout 2025, and Salesforce hasn’t escaped it.
Second, M&A concerns resurfaced. In late May, Salesforce agreed to acquire Informatica for roughly $8 billion—its biggest deal since Slack. While strategically aligned with the AI and data thesis, investors remain cautious about execution risk and the prospect of a renewed acquisition spree, both of which pressured shares over the summer.
Finally, AI monetization continues to test patience. The company is advancing its agents-plus-data stack (Agentforce + Data Cloud), but many analysts see adoption building gradually through 2025–2027. Coupled with leadership shifts—including the creation of a new President/CFO role and the COO’s retirement—this has left investors in wait-and-see mode heading into earnings.
CRM Stays in the Middle of the Pack
Currently, Salesforce’s current P/E ratio of ~40 is above the sector average of 29, suggesting the stock is a touch overvalued. When it comes to revenue and EBITDA growth, CRM stock is in line with the sector median. The stock’s forward revenue growth is estimated at 9% while the sector median is 7.5%. Salesforce’s forward EBITDA growth is estimated at 10% while the sector median is 9.5%.
What Investors and Traders Will Look Out for Tomorrow
On the eve of CRM’s report, consensus pegs Q2 revenue around $10.13 billion, up ~8.7% year-over-year, implying an acceleration compared to the previous quarter’s 7.6% growth and squarely inside management’s 8%–9% outlook. The company guided revenue to be between $10.11 and $10.16 billion back in May, so the setup is really about execution rather than a guidance event. If delivered, that’s a cleaner growth cadence heading into the back half.
Investors may be wondering what could drive growth going forward, with analysts in agreement that the same levers management spotlighted last quarter, such as deeper Data Cloud adoption, early AgentForce activity, and more large deals bundling data with AI capabilities, should do the trick. In Q1, current remaining performance obligation (cRPO) rose 12% Y/Y, a healthy sign for near-term demand, and Data Cloud/AI ARR exited FY25 at ~$900 million. Such ingredients should support a modest re-acceleration for the stock.
Tactically, I’ll be watching segment commentary (Integration & Analytics as well as Platform) and their respective growth rates. External channel checks in the Salesforce ecosystem have highlighted the “flywheel” from loading records into Data Cloud to layering agents on top, precisely the pattern investors want to see translate into revenue mix. CRM’s conference call should provide some numbers around that arc, with key details likely to be shared during the call.
CRM’s Growth-Margin Mix Signals Strong Q2
Wall Street sits near $2.78 in adjusted EPS for Q2, roughly 8.6% above last year’s $2.56. Notably, the Street’s models still point to a faster EPS clip in the second half and into FY27 as opex discipline holds and data/AI monetization scales. Several reputable rundowns are framing medium-term EPS growth in the low to mid-teens (and higher in some cases).
The margin framework remains supportive as well. Management reiterated a robust 34% adjusted operating margin target for FY26, and Q1 margins landed above 32% on that basis. With strong cash generation, Salesforce can continue to fund AI/data while returning capital, which should prove helpful when the market scrutinizes profitability as much as growth.
Meanwhile, valuation helps the long side. At today’s levels, CRM trades around 22 to 23x this fiscal year’s expected EPS, well below its own long-term average and reasonable against consensus double-digit EPS growth over the medium term. If Q2 confirms the 8.7% revenue trajectory and ~$2.78 EPS, I see room for the multiple to rebound as investors become more comfortable with the growth/margin mix.
Is Salesforce a Buy, Sell, or Hold?
Wall Street remains fairly bullish on Salesforce, with the stock carrying a Moderate Buy consensus rating based on 17 Buy and eight Hold recommendations over the past three months. Impressively, not a single analyst rates the stock a Sell. In the meantime, CRM’s average stock price target of $335.80 suggests ~31% upside from current levels.
Salesforce Poised to Reassure Investors with Q2 2026 Results
This year’s selloff has been driven by softer revenue expectations, renewed concerns over M&A, and the slow build of AI monetization. Yet, those same factors could shift into tailwinds if Q2 delivers as projected. Results near $10.13 billion in revenue, roughly $2.78 in EPS, steady cRPO, and margins holding around 34% would demonstrate that the business engine is running smoothly—if not dramatically. With the stock still down about 31% from its peak, flat versus last year, and trading at just 22–23x forward earnings, I remain constructive heading into the release.