The Best Salesman for Salesforce Shares? The Chart
CRM is no longer a growth stock, but here's why I'm warming up to it.
You're reading 0 of 1 free page.
Register to read more or Unlock Pro — 50% Off Ends Soon
Former "Cloud King" and agentic AI darling Salesforce (CRM) held its annual Dreamforce conference this week. The fun began on Tuesday. That day, Salesforce and OpenAI announced an expansion of their existing relationship that will allow companies to access the Salesforce Agentforce 360 platform through ChatGPT. CRM sold off 3.6% that day.
CRM on Wednesday presented its vision for "agentic enterprise" going forward ahead of a question-and-answer session starring CEO Marc Benioff. The stock sold off an additional 1.3%. Then it happened late Wednesday, after the closing bell had finished with its business. Salesforce told reporters and analysts that its new long-term target will be more than $60 billion by the year 2030, excluding impacts from the pending acquisition of Informatica. That deal is expected to close at some point around mid-year 2026.
Salesforce says it is already seeing strong and growing momentum in its data and AI offering, that product generated revenue of $1.2 billion in the second quarter, which was up 120% from the year prior. Salesforce is expecting to achieve organic annual revenue growth of 10% or more between 2026 and 2030.
While that is hardly something that most investors would refer to as reflective of what we would think of as a "growth" stock, it would be a return to double-digit growth for the beleaguered software giant. Salesforce, for all of its hype, has experienced 10% year-over-year sales growth for exactly one quarter in its last nine. Salesforce has not seen greater than 10% sales growth since the April 2024 quarter. The stock, which closed down 35.6% on Wednesday from its 2025 high in January, actually took back a rough 6% in overnight trade on those honestly "modest" projections.
Earnings
Salesforce is not scheduled to report its fiscal third quarter until after Thanksgiving. Wall Street is looking for an adjusted earnings per share of $2.86 on revenue of about $10.3 billion. That would compare well to the year-ago comp of $2.41, while sporting annual sales growth of about 8.8%. Of the 44 sell-side analysts I can find that cover this name, 24 have increased their earnings estimates since the start of the quarter, 13 have cut their estimates since the start of the quarter and seven estimates have been left unrevised.
This morning, I have seen 12 five-star rated -- according to TipRanks -- analysts say something about Salesforce. Of those 12, we have 12 reiterations, 10 were of buy or buy-equivalent ratings, one was an outright "sell" and one was a hold. Of those 12, there was only one target price that moved in an upwardly mobile direction. That was Brian Peterson of Raymond James. That gives me some reason to pause amid this morning's excitement.
My Thoughts
Cash flows remain solid. The balance sheet remains strong. There is nothing wrong with this company. It has a good business and if believed, that business is about to heat up. A little. The stock is no longer a growth stock, but it is not valued like one. At 19-times forward looking earnings, the stock is fundamentally inexpensive relative to its peers.
I will not be going in large, but I do see the technical bull case for CRM. The shares are breaking out this morning from a smallish Falling Wedge pattern of bullish reversal. The pivot here is the 50-day simple moving average. That would produce a target of $280. This is where it gets interesting.
Should the stock really get going, it will run into its 200-day simple moving average, currently at $275. Professional managers would have to make a decision there. Then there is the large Double Bottom pattern with the $296 pivot.
There is a lot of reason for optimism on this chart. Both Relative Strength and the daily Moving Average Convergence Divergence look to possibly be ready to take on a more bullish posture as well. I don't want to get carried away, but some exposure is probably warranted. I will likely initiate after this article becomes public information. Rock & Roll. Don't forget your 8% rule.
At the time of publication, Guilfoyle had no position in any security mentioned.
