Salesforce Stock Pressure Eases Ahead Of Earnings – What Comes Next?

Salesforce’s stock price (NYSE: CRM) is 2.2% higher today ahead of earnings, catching what feels like a rare bid for a stock that is down 25% YTD, and 38% over the past 12 months. The company puts up fiscal Q4 results after market close, against the backdrop of concerns about AI-driven disruption to core CRM functions.

The expectations on Wall Street remain at $3.05 adjusted EPS and $11.18B revenue, matching management’s prior Q4 midpoint on revenue and implying minimal room for upside surprise on the top line. The stock has been under significant pressure in recent months, erasing gains from the prior quarter’s 13.6% EPS beat, as investors shifted focus from backward execution to forward AI monetization credibility.

The setup is defined by a valuation disconnect rather than estimate uncertainty. With the stock trading 67% below the average analyst price target of $309.96, the market is pricing either severe structural risk to the CRM model or a prolonged period of growth deceleration that consensus models do not capture.

Recent analyst downgrades have centered on customer spending caution and the threat that AI tools could cannibalize traditional CRM seat-based revenue.

The outcome will determine whether Salesforce can sustain its margin-driven re-rating or whether the stock reverts to a mature SaaS multiple despite consistent profitability.

Options are pricing a 9% move in either direction, above the 1.1% average historical post-earnings reaction but below the volatility implied by the year-to-date drawdown.

Consensus Estimates

Consensus has converged on management’s own Q4 revenue midpoint of $11.18B, eliminating the gap that typically creates estimate risk. The EPS expectation of $3.05 sits marginally above the guided midpoint of $3.03, implying the Street expects modest operating leverage but no material upside surprise. Estimate stability over the past 30 days suggests analysts are waiting for the print and FY27 guidance before adjusting models.

Management Guidance & Commentary

“Our Agentforce and Data 360 products are the momentum drivers, hitting nearly $1.4 billion in annual recurring revenue, an explosive 114% year-over-year gain. We now have over 9,500 paid Agentforce deals and 3.2 trillion tokens processed, underscoring our leadership in building the Agentic Enterprise and driving real outcomes.”

Management’s Q3 commentary emphasized AI product traction as the primary growth catalyst, with CEO Marc Benioff framing Agentforce as a platform shift rather than a feature enhancement. The $1.4B ARR figure for combined Agentforce and Data 360 offerings represents a discrete revenue stream growing at triple-digit rates, but the critical question is whether this growth is incremental or cannibalistic.

The company must demonstrate that AI products expand wallet share rather than merely automate existing workflows at lower price points.

The Q4 revenue guide of $11.13B to $11.23B implies 11.7% year-over-year growth at the midpoint, a modest acceleration from Q3’s 8% constant-currency growth. The guidance framework has been conservative relative to execution throughout FY26, with Salesforce beating or meeting revenue expectations in three of the past four quarters while consistently exceeding EPS consensus.

Analyst Price Targets & Ratings

Wall Street remains largely bullish with 75% of analysts rating shares a Buy or Strong Buy. However, recent analyst commentary has been mixed, with several firms cutting price targets due to AI disruption concerns. UBS reduced its target to $200 (from $260) and Oppenheimer to $275 (from $335), citing competitive headwinds and customer spending caution.

Sector & Peer Comparison

Salesforce trades at a forward P/E of 18.9x, a significant discount to Oracle (42.2x), Microsoft (33.3x), and Intuit (29.5x), reflecting market skepticism about its ability to sustain double-digit growth. The forward multiple compression relative to peers is driven by slower revenue growth expectations and uncertainty about whether AI monetization will prove incremental or cannibalistic.

Earnings Track Record

Salesforce has beaten adjusted EPS estimates in 17 of the past 18 quarters, with an average surprise of 12.4%. The lone miss came in Q3 FY25, marking the beginning of the current valuation compression cycle. The track record establishes credibility on profitability but does not resolve the forward growth question.

Post-Earnings Price Movement History

The average next-day move following earnings is negative 1.1%, with beats averaging negative 1.2%. This pattern reflects a market that has consistently sold EPS beats when forward guidance failed to support multiple expansion. The Q2 FY26 result where a 4.7% EPS beat triggered a 5.3% selloff exemplifies this dynamic.

Expected Move & Implied Volatility

Options are pricing a 9% move in either direction, substantially above the 1.1% average historical post-earnings reaction. The elevated implied volatility reflects uncertainty about whether AI represents a threat or catalyst to Salesforce’s business model, and whether FY27 guidance will demonstrate AI monetization translating to consolidated growth acceleration.

Expert Predictions & What to Watch

Key Outlook: Cautiously Neutral with Downside Bias

The base case assumes Salesforce delivers adjusted EPS above $3.05 and revenue at or slightly above the $11.18B consensus, consistent with the company’s pattern of conservative guidance and modest beats. The critical variable is not the Q4 print but the FY27 revenue growth framework.

Key Metrics to Watch

The FY27 revenue growth guidance is the single most important data point. A framework implying 12% or higher growth with credible drivers tied to AI consumption would narrow the valuation gap to peers. Growth guidance in the 8% to 9% range would confirm the market’s skepticism and likely drive the stock toward $150 to $170.

Current remaining performance obligations (cRPO) provide the most reliable forward indicator of revenue trajectory. Q3’s 11% constant-currency growth suggested improving momentum, but investors will scrutinize whether that acceleration continues. A deceleration would undermine confidence in the pipeline and raise questions about customer spending patterns.

For investors considering exposure to CRM or technology stocks more broadly, understanding the fundamentals of trading vs investing approaches can help determine the most appropriate strategy given the elevated volatility expected around this earnings announcement.