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Salesforce Earnings Preview: Can Q3 Results Halt the 30% Slide?

MarketDash Editorial Team
5 days ago
Salesforce reports Q3 results Wednesday with record revenue expected, but analysts are divided on whether the CRM giant can prove its AI investments are paying off after shares tumbled nearly 30% this year.

Salesforce Inc. (CRM) reports third-quarter earnings Wednesday after the close, and the stakes are high. The customer relationship management giant has watched its shares crater nearly 30% this year, making investors hungry for proof that all those AI investments are actually going to pay off.

The company will likely highlight progress on its AI tools and recent acquisitions when it unveils results. But the real question is whether management can deliver guidance strong enough to stop the bleeding.

What Wall Street Expects

Analysts are looking for third-quarter revenue of $10.27 billion, up from $9.44 billion a year ago, according to data from Benzinga Pro. If the company hits that number, it would mark another record, topping the $10.24 billion Salesforce posted in Q2.

The company has a solid track record here, beating revenue estimates in two consecutive quarters and eight of the last ten overall. On the earnings side, analysts expect $2.86 per share, compared to $2.41 in last year's third quarter. Salesforce has beaten earnings estimates in three straight quarters and nine of the last ten.

Management's own guidance called for Q3 revenue between $10.24 billion and $10.29 billion, with earnings per share in the $2.84 to $2.86 range. So expectations are basically in line with what the company telegraphed.

The AI Skepticism Problem

Jay Woods, Chief Market Strategist at Freedom Capital Markets, isn't pulling punches about Salesforce's AI situation.

"Salesforce has become the poster child of the AI/tech spend that failed to keep going. As price momentum around AI related names continues to hit a recent lag, CRM was the first to feel that effect," Woods said in a weekly newsletter.

Woods acknowledged there was "justified" buzz around AgentForce, the company's much-hyped AI platform. But now comes the hard part: actually making money from it. "The AI narrative is loud and under the microscope, if they report slower growth or weaker guidance then investors may reassess its future trajectory."

From a technical perspective, Woods noted that the stock is testing the $230 level for the third time. "This $230 level has been tested twice before and held – will it hold again?" He warned the chart shows room for more downside before shares would be considered oversold, potentially putting pressure on the stock around earnings.

Analyst Ratings Paint Mixed Picture

Wall Street analysts have a wide range of views on where Salesforce is headed:

  • Citizens: Market Outperform rating with a $430 price target
  • Oppenheimer: Outperform rating, but lowered price target from $315 to $300
  • Citigroup: Neutral rating with price target cut from $276 to $253
  • Cantor Fitzgerald: Overweight rating with $325 price target
  • Bank of America: Buy rating, but reduced price target from $325 to $305

What Actually Matters Wednesday

Salesforce posted 10% year-over-year revenue growth in Q2, with strong remaining performance obligations hitting $29.4 billion. Investors will want to see continued double-digit growth, and ideally some acceleration in Q3.

Here's the thing though: when the company raised its full-year guidance after Q2 results, investors and analysts shrugged. Many expected bigger numbers. With record revenue likely already baked into the share price for Q3, another guidance raise is basically assumed. The question is whether it's big enough to impress a skeptical market.

One factor that could help: the company's recent acquisition spree probably isn't fully reflected in previous guidance. Salesforce completed its acquisition of Informatica in November and also closed deals for Doti (an agentic enterprise search company) and Spindle AI (an agentic analytics platform) the same month.

These acquisitions are designed to supercharge the AgentForce platform and bolster the company's AI capabilities. Management might factor these companies into updated guidance, which could provide a catalyst for the stock.

The Year-to-Date Damage

Salesforce stock traded up 1.2% to $235.71 on Tuesday, sitting within its 52-week range of $221.96 to $369.00. But zoom out to the full year, and shares are down 29.5% in 2025.

Wednesday's report will show whether the company can turn that narrative around, or if investors need to brace for more pain ahead.

Back to News

Salesforce Earnings Preview: Can Q3 Results Halt the 30% Slide?

MarketDash Editorial Team
5 days ago
Salesforce reports Q3 results Wednesday with record revenue expected, but analysts are divided on whether the CRM giant can prove its AI investments are paying off after shares tumbled nearly 30% this year.

Salesforce Inc. (CRM) reports third-quarter earnings Wednesday after the close, and the stakes are high. The customer relationship management giant has watched its shares crater nearly 30% this year, making investors hungry for proof that all those AI investments are actually going to pay off.

The company will likely highlight progress on its AI tools and recent acquisitions when it unveils results. But the real question is whether management can deliver guidance strong enough to stop the bleeding.

What Wall Street Expects

Analysts are looking for third-quarter revenue of $10.27 billion, up from $9.44 billion a year ago, according to data from Benzinga Pro. If the company hits that number, it would mark another record, topping the $10.24 billion Salesforce posted in Q2.

The company has a solid track record here, beating revenue estimates in two consecutive quarters and eight of the last ten overall. On the earnings side, analysts expect $2.86 per share, compared to $2.41 in last year's third quarter. Salesforce has beaten earnings estimates in three straight quarters and nine of the last ten.

Management's own guidance called for Q3 revenue between $10.24 billion and $10.29 billion, with earnings per share in the $2.84 to $2.86 range. So expectations are basically in line with what the company telegraphed.

The AI Skepticism Problem

Jay Woods, Chief Market Strategist at Freedom Capital Markets, isn't pulling punches about Salesforce's AI situation.

"Salesforce has become the poster child of the AI/tech spend that failed to keep going. As price momentum around AI related names continues to hit a recent lag, CRM was the first to feel that effect," Woods said in a weekly newsletter.

Woods acknowledged there was "justified" buzz around AgentForce, the company's much-hyped AI platform. But now comes the hard part: actually making money from it. "The AI narrative is loud and under the microscope, if they report slower growth or weaker guidance then investors may reassess its future trajectory."

From a technical perspective, Woods noted that the stock is testing the $230 level for the third time. "This $230 level has been tested twice before and held – will it hold again?" He warned the chart shows room for more downside before shares would be considered oversold, potentially putting pressure on the stock around earnings.

Analyst Ratings Paint Mixed Picture

Wall Street analysts have a wide range of views on where Salesforce is headed:

  • Citizens: Market Outperform rating with a $430 price target
  • Oppenheimer: Outperform rating, but lowered price target from $315 to $300
  • Citigroup: Neutral rating with price target cut from $276 to $253
  • Cantor Fitzgerald: Overweight rating with $325 price target
  • Bank of America: Buy rating, but reduced price target from $325 to $305

What Actually Matters Wednesday

Salesforce posted 10% year-over-year revenue growth in Q2, with strong remaining performance obligations hitting $29.4 billion. Investors will want to see continued double-digit growth, and ideally some acceleration in Q3.

Here's the thing though: when the company raised its full-year guidance after Q2 results, investors and analysts shrugged. Many expected bigger numbers. With record revenue likely already baked into the share price for Q3, another guidance raise is basically assumed. The question is whether it's big enough to impress a skeptical market.

One factor that could help: the company's recent acquisition spree probably isn't fully reflected in previous guidance. Salesforce completed its acquisition of Informatica in November and also closed deals for Doti (an agentic enterprise search company) and Spindle AI (an agentic analytics platform) the same month.

These acquisitions are designed to supercharge the AgentForce platform and bolster the company's AI capabilities. Management might factor these companies into updated guidance, which could provide a catalyst for the stock.

The Year-to-Date Damage

Salesforce stock traded up 1.2% to $235.71 on Tuesday, sitting within its 52-week range of $221.96 to $369.00. But zoom out to the full year, and shares are down 29.5% in 2025.

Wednesday's report will show whether the company can turn that narrative around, or if investors need to brace for more pain ahead.

    Salesforce Earnings Preview: Can Q3 Results Halt the 30% Slide? - MarketDash News