Salesforce Earnings Preview: (NYSE:CRM) Stock Under Pressure Leading In

Salesforce's stock (NYSE:CRM) has come under a lot of pressure this year, with the company losing almost a quarter of market cap (-23.53%) since the start of 2025. With earnings due today, there will be many holding their breath, with the $250 level holding up for now.

Analysts are looking for an EPS of $2.78, up from $2.56 in the same quarter last year. Revenue is expected to reach $10.14 billion, reflecting a year-over-year growth rate of 8.71%.

A key driver of what had been seen as Salesforce's success is its AI platform, Agentforce. Having closed over 8,000 deals since its launch, with half already paid, Agentforce contributes more than $1 billion in annual recurring revenue from Data Cloud and AI products.

Some analysts predict that Agentforce could become Salesforce's largest revenue contributor by the end of 2026, signaling a significant shift towards AI-driven revenue streams, but is the growth fast enough to satisfy markets?

Further solidifying its data capabilities, Salesforce acquired Informatica for approximately $8 billion. This strategic move is expected to enhance Salesforce's data management tools, crucial for its ongoing AI transformation. The acquisition is projected to be accretive to non-GAAP operating margin, non-GAAP EPS, and free cash flow within two years post-close, suggesting a long-term vision for integrated data solutions.

Looking ahead, Salesforce has raised its fiscal 2026 revenue forecast to a range of $41 billion to $41.3 billion, up from the previous estimate of $40.5 billion to $40.9 billion. The adjusted EPS forecast has also been increased to between $11.27 and $11.33. These optimistic projections reflect the company's confidence in sustained growth, driven by AI initiatives and the strategic integration of Informatica.

While the prevailing narrative focuses on AI and strategic acquisitions as the primary growth drivers, it's worth questioning whether Salesforce is truly innovating or simply acquiring growth. The Informatica acquisition, while strategically sound, raises concerns about integration challenges and whether it truly addresses underlying issues within Salesforce's core CRM platform.

Furthermore, the reliance on Agentforce as the primary growth engine introduces a level of risk. If AI adoption slows or competitors emerge with superior solutions, Salesforce's growth trajectory could be significantly impacted.

The market may be rightly discounting the stock due to a perceived lack of organic innovation and an over-reliance on acquisitions to maintain growth momentum. This “buy growth” strategy may prove unsustainable in the long run, particularly if interest rates remain elevated and acquisition targets become more expensive.

Despite the positive earnings report and strategic initiatives, Salesforce faces significant challenges. The stock's underperformance year-to-date, coupled with bearish technical indicators, suggests that investors remain cautious.