Salesforce CRM delivered stronger-than-expected fiscal third-quarter results on Wednesday, surpassing Wall Street expectations for adjusted earnings and offering upbeat revenue guidance for the fourth quarter. The stock gained about 2.5% in after-hours trading, following the announcement.
Inside the Earnings Results
The company reported adjusted earnings of $3.25 per share, topping the Zacks Consensus Estimateof $2.85, while revenues came in at $10.26 billion, missing the Zacks Consensus Estimate by 0.05%.
Revenues rose 8.6% from a year earlier, and net income increased to $2.09 billion, or $2.19 per share, compared with $1.53 billion, or $1.58 per share, helped by a $263 million benefit from strategic investments.
CFO Robin Washington noted that Tableau saw a higher mix of cloud services than anticipated during the quarter. Revenues from on-premises Tableau and MuleSoft products are recognized immediately, whereas cloud revenues are recognized over time, affecting quarterly performance patterns, as quoted on CNBC.
Fourth-Quarter Guidance
For Q4, Salesforce expects adjusted earnings of $3.02 to $3.04 per share and revenues between $11.13 billion and $11.23 billion, ahead of the Zacks Consensus Estimate of $3.01 per share and $10.89 billion, respectively. The guidance reflects the ongoing shift to cloud-based models for MuleSoft and Tableau and continued weakness in marketing and commerce products, as quoted on CNBC.
AI Acquisitions and Product Growth
During the quarter, Salesforce completed the acquisitions of Regrello, an AI task-automation startup, and Waii, which uses AI to generate code for data queries from natural-language input. The company also launched Agentforce, its AI platform for automating IT service workflows, and outlined a fiscal 2030 revenue target of $60 billion, exceeding analysts' expectations, as quoted on CNBC.
Stock Underperformance and AI Concerns
Despite the solid results, Salesforce shares have lagged the broader tech sector amid investor concerns that artificial intelligence could displace some of the company’s product capabilities, as mentioned in the above-said CNBC article. The stock is down 27.8% so far this year, while the Nasdaq-100 has climbed about 22%.
Price Target
Based on short-term price targets offered by 46 analysts, the average price target for Salesforce.com comes to $328.52. The forecasts range from a low of $221.00 to a high of $430.00. The average price target represents an increase of 39.97% from the closing price of $234.71 recorded on Dec. 2, 2025.
Broker Rating
Salesforce.com currently has an average brokerage recommendation (ABR) of 1.60 on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell etc.) made by 50 brokerage firms. The current ABR compares to an ABR of 1.59 a month ago based on 51 recommendations.
Of the 50 recommendations deriving the current ABR, 35 are Strong Buy and two are Buy. Strong Buy and Buy, respectively, account for 70% and 4% of all recommendations. A month ago, Strong Buy made up 70.59%, while Buy represented 3.92%.
ETFs in Focus
The stock comes from a top-ranked Zacks Industry (top 30%) and Zacks Sector (top 6%). Amid Salesforce’s shift toward a higher mix of cloud services, investors can play the stock via ETF form. The global cloud services market is expected to see a CAGR of 16.00% from 2025 to 2034, per Precedence Research.
Salesforce-heavy ETFs include the likes ofiShares Expanded Tech-Software Sector ETF IGV, Pacer US Cash Cows Growth ETF BUL and Themes Cloud Computing ETF CLOD.
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Salesforce Inc. (CRM): Free Stock Analysis Report iShares Expanded Tech-Software Sector ETF (IGV): ETF Research Reports Pacer US Cash Cows Growth ETF (BUL): ETF Research Reports Themes Cloud Computing ETF (CLOD): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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