Salesforce (CRM) is currently navigating a major shift in its corporate identity as the software giant prepares to report its third-quarter earnings on Wednesday afternoon. After decades of relentless expansion, the company has hit a saturation point, forcing it to move away from being just a pure growth leader to a company focused on profitability and the high-stakes push into Artificial Intelligence (AI).
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Wall Street analysts anticipate that adjusted earnings will be $2.86 a share on $10.3 billion in sales, marking an 8.8% rise from a year earlier. While earnings are expected to grow, the core focus for investors will be whether the AI pivot can successfully reignite sales growth.
Salesforce’s Sales Growth Drops after Decades of Expansion
Salesforce enjoyed an unusually long, industry-leading stretch of high growth, expanding by over 20% annually from its founding in 1999 until 2022. However, its core customer relationship management (CRM) software has now neared market saturation.
Annual sales growth has slowed dramatically, dropping to 8.7% in the last Fiscal year and remaining at that level thus far in fiscal year 2026. This slowdown has forced the company to become a “classic case of growth turning into value,” shifting investor focus away from expansion and toward efficiency.
Salesforce’s Profitability Surges as Margins Hit 33%
The slowdown in sales growth has been counterbalanced by a dramatic increase in profitability. Salesforce has transformed into a far more profitable company over the last two years.
Its free cash flow margin surged to 33% in 2025, up significantly from just 20% in 2023. The company has used this massive increase in cash flow to reward investors by funding dividends and executing share buybacks, successfully reducing the share count by 3.9% in the process.
AI Sales Provide Path To Double-Digit Growth
Salesforce is now banking on the Artificial Intelligence maelstrom to restore its previous growth trajectory. The company believes AI can get it back to double-digit percentage sales growth by selling generative AI products, specifically “agents,” that automate large portions of customer workflows.
The company has been more transparent than most peers about its progress, booking $440 million in annual recurring revenue from agentic AI products at the end of the last quarter. While this represents only about 1% of projected annual revenue, the figure is up over 400% from the year before, providing clear evidence that the AI strategy is gaining traction.
Is Salesforce a Good Stock to Buy?
Analyst sentiment toward Salesforce (CRM) is leaning positive, rated as a Moderate Buy based on the consensus of 39 analysts tracked in the last three months. Of these ratings, 29 analysts call it a Buy, nine recommend a Hold, and only one recommends a Sell.
The average 12-month CRM price target sits at $325.31. This target implies a strong upside potential of 38.60% from the last price.
