Salesforce Beats Q2 Earnings, 6 Analysts Raise Forecasts For This 'Under-Appreciated AI Winner'

Shares of Salesforce Inc CRM climbed in early trading on Thursday before sliding on the heels of an upbeat second-quarter financial report.

Here are some key analyst takeaways.

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Goldman Sachs analyst Kash Rangan maintained a Buy rating, while lifting the price target from $315 to $325.

• Salesforce's quarterly results came as a "relief for investors," as they affirmed a "stabilizing demand environment" and the reiteration of the full-year revenue guidance de-risks the back half, Rangan said.
• The number of paid Data Cloud customers grew 130%, the company signed 1,500 AI deals, and bookings for AI products more than doubled sequentially, the analyst stated. "We continue to see Salesforce as an under-appreciated AI winner as its differentiated data and early success in creating/deploying Gen-AI agents can solidify Salesforce's first mover advantage in enterprise-grade Gen-AI applications.”

Stifel analyst Parker Lane reiterated a Buy rating, while raising the price target from $300 to $320.

• Contrary to the previous quarter, Salesforce delivered stronger bookings and cRPO (current remaining performance obligation) figures, "driven by improved sales execution and early renewal favorability," Lane said. Agentforce, Einstein-powered genAI agents across Salesforce’s product portfolio, was "front-and-center on the call," he added.
• The company continued to witness strong trends in Data Cloud, the analyst stated. "We continue to believe Salesforce is well-positioned to be a leader in delivering genAI solutions to enterprises, and are pleased with the company’s progress from a profitability standpoint," he further wrote.

DA Davidson analyst Gil Luria reaffirmed a Neutral rating, while raising the price target from $230 to $250.

• Salesforce generated total revenues of $9.33 billion, beating consensus of $9.23 billion, "driven by resilient core product demand, strong data cloud growth, and license revenue outperformance," Luria wrote in a note. The company drive "profitable growth at scale," he added.
• Strong multi-cloud adoption trends accounted for 80% of new business in the quarter, and industry cloud momentum. Management guided to fiscal 2025 total revenue between $37.7 billion and $38.0 billion, "which includes a $100 million FX headwind and implies 8%-9% Y/Y growth.”

BMO Capital Markets analyst Keith Bachman maintained an Outperform rating, while lifting the price target from $265 to $305.

• Salesforce's cRPO growth in constant currency terms came at 11% year-on-year, which was "modestly better than we were thinking," Bachman said. Management guided to about 8.5% year-on-year cRPO growth for the October quarter, he added.
• "In 2HFY25, we note CRM faces difficult compares in the license business in both MuleSoft and Tableau," the analyst wrote. While the Integration & Analytics business could continue to decline, Sales Cloud and Service Cloud "can remain solid, at high single-digits, in part helped by industry cloud growth," he further stated.

Piper Sandler analyst Brent Bracelin reiterated a Neutral rating, while raising the price target from $250 to $268.

• Salesforce's results were "better-than-feared," and management commentary reaffirmed that the buying environment could remain challenging, Bracelin said. The results were highlighted by 9% ex-FX growth, a rebound in cRPO growth to 11%, and additional margin expansion to 33.7%.
• The second-half outlook of approximately 8% implies further moderation impacted by two years of measured spending; “several industry constraints flagged in the largest Americas region (66% of sales) where growth slowed to 7.5% y/y from 10.7% last quarter," the analyst wrote. He further expressed concern around the macro uncertainty, the departure of Salesforce's CFO at yearend, and the "pending multi-year model transition from applications to agents."

Truist Securities analyst Terry Tillman reaffirmed a Buy rating and price target of $300.

• Salesforce delivered a beat on revenues, profits and cRPO growth, "despite persistent tough macro," Tillman said.
• "Salesforce executed well on its strategic growth pillars and saw momentum in multi-cloud deals, international expansion, Industry Solutions performance, and sustained traction with Data Cloud and AI solutions," the analyst wrote. Agentforce is expected to be an "important new growth catalyst.”

Roth Capital Partners analyst Richard Baldry maintained a Buy rating and price target of $335.

• Salesforce's growth had strengthened in the fourth quarter of fiscal 2024, but reverted to weakness in the first quarter of fiscal 2025, and "while 2QF25 had modest upside, the guide for a flat sequential 3QF25 again reverts to weakness," Baldry said.
• "With 3QF25 guided soft, but F25 maintained, 4QF25 results signal an acceleration that appears risky," the analyst wrote. Despite the challenges, AI-based technologies are expected to "spark a growth rebound over the intermediate-term.”

RBC Capital Markets analyst Rishi Jaluria reiterated an Outperform rating and price target of $300.

• Salesforce reported a "decent quarter overall" and announced the planned departure of CFO Amy Weaver, Jaluria said.
• While the second-quarter results show "solid upside" with cRPO growth accelerating to 11%, the company reiterated its full-year guidance for total and subscription revenue growth, the analyst stated. The third-quarter cRPO implies a decelerated of around 200 bps, the full-year operating margin guidance shows an expansion of only 30 bps, he added.

CRM Price Action: Shares of Salesforce had slipped by 0.09% to $258.68 at the time of publication on Thursday.

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