Salesforce Rises 8% in Three Months: Should You Buy CRM Stock Now?

Salesforce, Inc. CRM shares have soared 8.5% over the past month. This surge has significantly outperformed the broader Zacks Computer – Software industry, which declined 4.4% during the same period.

The stock has also outpaced major enterprise software makers, including Microsoft Corporation MSFT, Oracle Corporation ORCL and SAP SE SAP. Shares of Microsoft, Oracle and SAP have declined 4.5%, 5.3% and 5.9%, respectively.

Salesforce One-Month Price Return Performance

The outperformance suggests that investors remain confident in Salesforce’s long-term story despite ongoing trade and geopolitical risks. Given the fundamentals, the stock appears to be a buy for now.

Salesforce’s Dominance in CRM Software Space

Salesforce remains the dominant player in the customer relationship management (“CRM”) software space. Its platform is deeply integrated across enterprise systems, making it a go-to solution for businesses.

Salesforce has expanded beyond just CRM through acquisitions like Slack, Informatica, Own Company and Zoomin. These deals reflect a long-term strategy to grow in areas like collaboration tools, cybersecurity and AI automation.

AI is central to Salesforce’s future. Its Einstein GPT product, launched in 2023, now powers generative AI features throughout the platform. These tools help users automate tasks, make better decisions and serve customers more efficiently.

Another long-term tailwind is rising global spending on generative AI. Gartner estimates that worldwide generative AI spending will hit $644 billion in 2025, implying a 76.4% year-over-year increase.

Enterprise software, a key segment for Salesforce, is expected to grow even faster, with a projected 93.9% increase. Even if economic conditions slow down spending in the short term, digital transformation remains a top priority for businesses, ensuring steady demand for Salesforce’s solutions.

Salesforce’s Resilient Financial Performance

Salesforce’s latest earnings report highlights just how resilient the company’s financials remain despite ongoing macroeconomic uncertainties. In the last reported results for the second quarter of fiscal 2026, the company’s revenues increased 10% year over year to $10.2 billion, while non-GAAP earnings soared 13.7% to $2.91 per share.

The growth in the top and bottom lines reflected the benefits of Salesforce’s go-to-market strategy and sustained focus on customer success. The initiatives to integrate generative AI into its offerings also boosted demand for the company’s solutions during the reported quarter.

The Zacks Consensus Estimate indicates that Salesforce will remain in a growth trajectory. The consensus mark for fiscal 2026 and 2027 revenues signifies a year-over-year increase of 8.8% and 9.1%, respectively. Earnings estimate for fiscal 2026 and 2027 indicates year-over-year growth of 10.9% and 11.9%, respectively.

Valuation: Salesforce Still a Bargain Pick

Despite the recent rally, Salesforce shares are trading at a discounted valuation multiple compared to the industry. The stock currently trades at a forward 12-month price-to-earnings (P/E) multiple of 20.81, below the industry average of 31.94.

Salesforce Forward 12-Month P/E Ratio

Salesforce has a lower P/E ratio than other major enterprise software makers, including Microsoft, Oracle and SAP. At present, Microsoft, Oracle and SAP trade at P/E multiples of 31.44, 34.13 and 34.97, respectively.

Conclusion: Buy Salesforce Stock for Now

Salesforce remains a dominant player in enterprise software with strong positioning in AI and the CRM software market. Its current valuation is reasonable, and long-term tailwinds like AI adoption and digital transformation continue to support the growth story. All these factors suggest accumulating the stock for now.

Moreover, Salesforce carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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