Salesforce (CRM) Has a $315 Bull Case, but Earnings Need to Prove One Thing

Salesforce Inc. (NYSE:CRM) has a bullish outlook with a $315 price target, despite a 19% year-to-date decline. The firm cited a 50% increase in positive industry checks from Q2 compared to the previous quarter. However, Salesforce has been impacted by the broader market selloff in SaaS companies, known as the SaaSpocalypse. Despite this, the company reported record revenue of $11.1 billion in the first quarter, up 13% year-over-year, and has raised its full-year revenue forecast to $45.9 billion to $46.2 billion.

Salesforce's AI metrics, particularly Agentforce, have also shown significant growth, with annualized revenue reaching $1.2 billion, a 205% increase year-over-year. The company's current remaining performance obligation (CRPO) has increased by approximately 14% nominal and 13% in constant currency. Analysts see potential in Salesforce's Agentforce and Data360, with the hope that these divisions can drive CRPO and organic growth higher.

However, the stock is expected to deliver revenues between $11.27 billion and $11.35 billion in Q2, with growth coming from Informatica accounting for just over four percentage points. Despite the challenges, hedge fund interest in Salesforce remains robust, with institutional interest building despite broader concerns over AI.