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Salesforce Climbs 22% in Six Months: Is the Stock Still Worth Buying?
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Key Takeaways
Salesforce shares have gained 22% in six months, outperforming the tech sector and major software peers.
CRM's Agentforce ARR surged more than 240%, while fiscal 2027 revenue guidance was raised to $46.10-$46.40B.
CRM trades at 14.15 times forward earnings, well below the sector's 27.05, supporting its investment appeal.
Salesforce, Inc. (CRM - Free Report) shares have gained 22% over the past six months, comfortably outperforming the broader Zacks Computer and Technology sector, which has declined 0.9% during the same period. The stock has also outpaced several major enterprise software peers, including ServiceNow, Inc. (NOW - Free Report) , Adobe Inc. (ADBE - Free Report) and Oracle Corporation (ORCL - Free Report) . While ServiceNow has gained 15.3%, Adobe and Oracle have declined 1% and 33.9%, respectively.
Salesforce Six-Month Price Return Performance
Image Source: Zacks Investment Research
Salesforce's strong rally raises an important question: Is the stock still a good buying opportunity, or has much of its growth potential already been priced in?
The outperformance suggests that investors are becoming more confident about Salesforce's growth prospects. Improving financial performance, growing artificial intelligence (AI) adoption and a relatively attractive valuation make a strong case for the stock. Let's examine the factors that could support further upside.
Salesforce's Revenue Growth Shows Signs of Stabilizing
Salesforce generated $11.35 billion in second-quarter fiscal 2027 revenues, up 10.8% year over year. Subscription and support revenues, which account for most of its business, increased 11.7% to $10.82 billion. Current remaining performance obligation (cRPO), an important indicator of revenues expected over the next 12 months, rose 14% to $33.5 billion. The results are significant because slowing growth has been a major concern for Salesforce. As the company has grown, maintaining its earlier hypergrowth rates has naturally become harder.
However, second-quarter results suggest that the slowdown may be stabilizing. Strong bookings, low customer attrition and improving net new annual order value are positive indicators of future demand. During the last earnings call, management also pointed to longer contract periods for new agreements and renewals, suggesting that customers are making longer-term commitments to Salesforce's solutions.
The company's guidance further supports this outlook. For the third quarter, Salesforce expects revenues of $11.42-$11.50 billion, calling for year-over-year growth of 11%-12%. It also raised its fiscal 2027 revenue outlook to $46.10-$46.40 billion from $45.90-$46.20 billion.
For a company of Salesforce's size, maintaining double-digit revenue growth is a meaningful achievement. The improved outlook suggests that its core business remains healthy and provides a solid foundation for future growth. CRM's revenue projections are also broadly in line with the Zacks Consensus Estimates.
Image Source: Zacks Investment Research
Salesforce's AI Push Opens New Growth Opportunities
Salesforce's biggest growth opportunity may lie beyond its traditional customer relationship management (CRM - Free Report) business. The company is gradually transforming itself into a broader enterprise software platform built around AI, data management and automation.
Agentforce is central to this strategy. Agentforce’s annual recurring revenues (ARR) surpassed $1.5 billion in the second quarter, increasing more than 240% year over year. Combined Agentforce and Data 360 ARR reached nearly $3.9 billion, up more than 210%. Customer adoption is also gaining momentum. Salesforce processed 3.2 billion Agentic Work Units during the quarter, up 97% sequentially. Bookings for Agentforce One Edition and Agentforce for Apps more than doubled.
These figures indicate that Salesforce is making progress in turning AI interest into actual business demand. However, the bigger opportunity will depend on whether customers continue expanding their use of these products and whether that adoption translates into sustainable revenue growth.
Data 360 is another important part of this strategy. The platform processed 104 trillion records during the quarter, up 355% year over year. Records processed through Zero Copy increased 731% to 82 trillion. This rapid expansion strengthens Salesforce's position in enterprise data management and supports its AI offerings.
Slack is adding to the growth story as well. The platform recorded its fastest quarterly net new annual order value growth since Salesforce acquired the business. Slackbot users increased more than 150% sequentially, highlighting growing customer interest in AI-powered workplace productivity tools. The Informatica acquisition also strengthens Salesforce's capabilities in data management. Informatica contributed $456 million to second-quarter revenues, including $440 million from subscription and support revenues. Salesforce expects the acquisition to add slightly more than three percentage points to fiscal 2027 revenue growth.
Taken together, these developments suggest that Salesforce is doing more than defending its traditional CRM business against emerging AI competition. It is building a broader platform that connects customer data, AI agents and enterprise applications. If adoption continues at the current pace, these businesses could become meaningful contributors to long-term growth.
Salesforce's Valuation Still Supports Further Upside
Valuation is another reason investors can remain positive about Salesforce. Despite the stock's recent rally, CRM trades at approximately 13.97 times forward 12-month earnings, considerably below the sector's average of 17.80 times.
Salesforce Forward 12-Month P/E Ratio
Image Source: Zacks Investment Research
Compared with major enterprise software peers, Salesforce also appears reasonably valued. ServiceNow trades at a higher forward price-to-earnings multiple of 22.07, while Adobe and Oracle trade at 9.15 and 12.76 times, respectively.
Salesforce's valuation is not the cheapest in the group, but it is still attractive, considering its improving revenue outlook and expanding AI business. Its lower multiple than ServiceNow also suggests that investors are not paying an excessive premium for its growth prospects.
Final Verdict: Buy Salesforce Stock for Now
Salesforce's 22% rally over the past six months may make some investors cautious about buying the stock at current levels. However, the company's improving revenue outlook, strong subscription business and rapid expansion of Agentforce and Data 360 provide reasons to remain optimistic.
Salesforce's AI strategy is beginning to show measurable results through higher ARR, rising customer adoption and growing platform usage. The Informatica acquisition and Slack's improving momentum strengthen its long-term growth opportunities.
Its forward P/E multiple of 14.15 times also looks reasonable compared with the broader technology sector and several enterprise software peers. Considering these factors, it is wise to buy Salesforce shares now.
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Salesforce Climbs 22% in Six Months: Is the Stock Still Worth Buying?
Key Takeaways
Salesforce, Inc. (CRM - Free Report) shares have gained 22% over the past six months, comfortably outperforming the broader Zacks Computer and Technology sector, which has declined 0.9% during the same period. The stock has also outpaced several major enterprise software peers, including ServiceNow, Inc. (NOW - Free Report) , Adobe Inc. (ADBE - Free Report) and Oracle Corporation (ORCL - Free Report) . While ServiceNow has gained 15.3%, Adobe and Oracle have declined 1% and 33.9%, respectively.
Salesforce Six-Month Price Return Performance
Image Source: Zacks Investment Research
Salesforce's strong rally raises an important question: Is the stock still a good buying opportunity, or has much of its growth potential already been priced in?
The outperformance suggests that investors are becoming more confident about Salesforce's growth prospects. Improving financial performance, growing artificial intelligence (AI) adoption and a relatively attractive valuation make a strong case for the stock. Let's examine the factors that could support further upside.
Salesforce's Revenue Growth Shows Signs of Stabilizing
Salesforce generated $11.35 billion in second-quarter fiscal 2027 revenues, up 10.8% year over year. Subscription and support revenues, which account for most of its business, increased 11.7% to $10.82 billion. Current remaining performance obligation (cRPO), an important indicator of revenues expected over the next 12 months, rose 14% to $33.5 billion. The results are significant because slowing growth has been a major concern for Salesforce. As the company has grown, maintaining its earlier hypergrowth rates has naturally become harder.
However, second-quarter results suggest that the slowdown may be stabilizing. Strong bookings, low customer attrition and improving net new annual order value are positive indicators of future demand. During the last earnings call, management also pointed to longer contract periods for new agreements and renewals, suggesting that customers are making longer-term commitments to Salesforce's solutions.
The company's guidance further supports this outlook. For the third quarter, Salesforce expects revenues of $11.42-$11.50 billion, calling for year-over-year growth of 11%-12%. It also raised its fiscal 2027 revenue outlook to $46.10-$46.40 billion from $45.90-$46.20 billion.
For a company of Salesforce's size, maintaining double-digit revenue growth is a meaningful achievement. The improved outlook suggests that its core business remains healthy and provides a solid foundation for future growth. CRM's revenue projections are also broadly in line with the Zacks Consensus Estimates.
Image Source: Zacks Investment Research
Salesforce's AI Push Opens New Growth Opportunities
Salesforce's biggest growth opportunity may lie beyond its traditional customer relationship management (CRM - Free Report) business. The company is gradually transforming itself into a broader enterprise software platform built around AI, data management and automation.
Agentforce is central to this strategy. Agentforce’s annual recurring revenues (ARR) surpassed $1.5 billion in the second quarter, increasing more than 240% year over year. Combined Agentforce and Data 360 ARR reached nearly $3.9 billion, up more than 210%. Customer adoption is also gaining momentum. Salesforce processed 3.2 billion Agentic Work Units during the quarter, up 97% sequentially. Bookings for Agentforce One Edition and Agentforce for Apps more than doubled.
These figures indicate that Salesforce is making progress in turning AI interest into actual business demand. However, the bigger opportunity will depend on whether customers continue expanding their use of these products and whether that adoption translates into sustainable revenue growth.
Data 360 is another important part of this strategy. The platform processed 104 trillion records during the quarter, up 355% year over year. Records processed through Zero Copy increased 731% to 82 trillion. This rapid expansion strengthens Salesforce's position in enterprise data management and supports its AI offerings.
Slack is adding to the growth story as well. The platform recorded its fastest quarterly net new annual order value growth since Salesforce acquired the business. Slackbot users increased more than 150% sequentially, highlighting growing customer interest in AI-powered workplace productivity tools. The Informatica acquisition also strengthens Salesforce's capabilities in data management. Informatica contributed $456 million to second-quarter revenues, including $440 million from subscription and support revenues. Salesforce expects the acquisition to add slightly more than three percentage points to fiscal 2027 revenue growth.
Taken together, these developments suggest that Salesforce is doing more than defending its traditional CRM business against emerging AI competition. It is building a broader platform that connects customer data, AI agents and enterprise applications. If adoption continues at the current pace, these businesses could become meaningful contributors to long-term growth.
Salesforce's Valuation Still Supports Further Upside
Valuation is another reason investors can remain positive about Salesforce. Despite the stock's recent rally, CRM trades at approximately 13.97 times forward 12-month earnings, considerably below the sector's average of 17.80 times.
Salesforce Forward 12-Month P/E Ratio
Image Source: Zacks Investment Research
Compared with major enterprise software peers, Salesforce also appears reasonably valued. ServiceNow trades at a higher forward price-to-earnings multiple of 22.07, while Adobe and Oracle trade at 9.15 and 12.76 times, respectively.
Salesforce's valuation is not the cheapest in the group, but it is still attractive, considering its improving revenue outlook and expanding AI business. Its lower multiple than ServiceNow also suggests that investors are not paying an excessive premium for its growth prospects.
Final Verdict: Buy Salesforce Stock for Now
Salesforce's 22% rally over the past six months may make some investors cautious about buying the stock at current levels. However, the company's improving revenue outlook, strong subscription business and rapid expansion of Agentforce and Data 360 provide reasons to remain optimistic.
Salesforce's AI strategy is beginning to show measurable results through higher ARR, rising customer adoption and growing platform usage. The Informatica acquisition and Slack's improving momentum strengthen its long-term growth opportunities.
Its forward P/E multiple of 14.15 times also looks reasonable compared with the broader technology sector and several enterprise software peers. Considering these factors, it is wise to buy Salesforce shares now.
Currently, Salesforce carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.