Corporate software maker Salesforce (CRM) shares have fallen roughly 30% year-to-date, materially lagging the broader S&P 500’s (SPX) double-digit gain. While macro uncertainty, elongated deal cycles, and investor concerns about AI disruption have weighed on sentiment, I believe expectations have now reset to a level that limits further downside.
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With valuation attractive, guidance conservative, and several emerging product catalysts beginning to take hold, I remain bullish heading into the company’s results tomorrow. In my view, the recent weakness presents a compelling opportunity for long-term investors to accumulate shares.
A Low Bar Salesforce is Likely to Clear
Salesforce will report fiscal Q3 2026 earnings after tomorrow’s market close. Consensus estimates call for EPS of $2.86 and revenue of $10.27 billion. While the revenue estimate has only inched higher by about 0.4% over the past year, analysts have raised EPS expectations by more than 4%, reflecting confidence in Salesforce’s continued cost discipline and margin strength.
Historically, Salesforce has been a consistent performer: over the past 20 quarters, the company exceeded both EPS and revenue expectations 17 times.
I believe another beat is likely this quarter. Guidance issued last quarter was conservative, particularly regarding Current Remaining Performance Obligation (CRPO), which management projected would grow only 10% year-over-year. With momentum building around Agentforce and Data Cloud, and with pricing tailwinds from earlier price changes still flowing through, I expect CRPO growth to exceed guidance, supporting upside to both revenue and EPS.
While macro conditions and elongated sales cycles continue to affect enterprise software budgets, expectations entering Q3 are subdued. This “low bar” creates a favorable setup, especially given recent signs of stabilization in Salesforce’s sales pipeline and growing traction in its AI offerings.
Agentforce, Data Cloud, and the Path to Reacceleration
A key investor concern has been whether Salesforce’s transition toward Agentforce—the company’s flagship AI and automation platform—would create near-term disruption. Some customers have taken longer to evaluate higher-priced bundles, and enterprise prioritization of AI spending has heightened scrutiny of ROI, cost predictability, and internal deployment complexity.
However, the early signs of adoption are encouraging. Agentforce, together with Data Cloud, is becoming increasingly central to Salesforce’s strategic pitch, enabling businesses to automate workflows, connect disparate data sources, and deploy AI agents across sales, service, marketing, and commerce. Customers appear to be planning for larger deployments over time, even if initial rollouts remain modest, given budgeting constraints.
The Informatica acquisition—closed on November 18—eliminates a lingering overhang and expands Salesforce’s ability to work with raw data before it enters the AI and analytics layers of the platform. Integrating Informatica’s capabilities strengthens Data Cloud’s foundation and could enhance future cross-sell opportunities.
As more enterprises begin to capture tangible productivity gains from Agentforce and Data Cloud, I expect Salesforce to have a more straightforward path to reaccelerating growth from current sub-10% levels.
AI Opportunity Underappreciated
Despite concerns about competitive threats from large AI model providers and new software entrants, I believe Salesforce is structurally advantaged in the AI transition. The company sits on one of the world’s largest repositories of structured customer interaction data. This creates enormous “data gravity,” strengthening the value of Salesforce’s AI offerings and increasing switching costs.
Moreover, the company’s AI momentum appears durable. As organizations modernize their technology stacks, Salesforce’s role in orchestrating data, automating workflows, and deploying AI agents positions it as a core beneficiary of enterprise AI adoption. Over time, as deployments scale and customers broaden their usage, AI should support higher product penetration, stronger pricing power, and a stronger growth trajectory.
Importantly, Salesforce has a CEO who is highly focused on steering the company through the AI transformation. With the product roadmap now defined and early traction visible, the company appears positioned to benefit from the multi-year shift toward intelligent automation and data-driven decision-making.
Beyond the near-term earnings setup, Salesforce’s longer-term narrative remains constructive. The company is deeply embedded within enterprise IT stacks, and its breadth across CRM, analytics, integration, automation, and AI makes it difficult for customers to replace. As Salesforce monetizes Agentforce and Data Cloud more fully, and as pricing benefits roll through, the company should continue capturing a larger share of corporate IT budgets.
Compelling Valuation Relative to Its Peers
After a 30% year-to-date decline, Salesforce now trades at valuations that are difficult to ignore. Its forward P/E of 21.80 sits below the software sector’s median of 23.70. The price-to-cash-flow of 16.80 also represents a discount to the sector median of 18.40.
Using a combination of valuation approaches—including DCF, revenue multiples, and P/E comparables—I estimate fair value at approximately $300 per share, implying more than 28% upside from current levels.
Is CRM a Good Stock to Buy Now?
On Wall Street, CRM is a hot favorite with the stock carrying a Moderate Buy consensus rating based on 30 Buy, nine Hold, and one Sell ratings over the past three months. CRM’s average stock price target of $324.08 implies almost 38% upside potential over the next twelve months.
A Reset Story With Upside Potential
Salesforce enters Q3 earnings with low expectations and a valuation that already reflects macro concerns, elongated sales cycles, and investor skepticism around the company’s AI transition. Yet the fundamentals remain healthier than sentiment implies, and momentum around Agentforce and Data Cloud continues to build.
With the stock down sharply year-to-date, I view this period of weakness as an opportunity. I remain bullish on Salesforce and expect Q3 results to serve as a reminder that the long-term investment case remains firmly intact.