Can AI and Cloud Strength Keep Salesforce's Growth on Track in Q4?

Salesforce, Inc. CRM is set to release its fourth-quarter fiscal 2026 earnings on Feb. 25, and investors might be wondering whether its heavy investment in artificial intelligence (AI) and cloud products is translating into real financial gains.

Despite a tough macro environment, demand for digital tools remains healthy, and Salesforce has positioned itself well with subscription-based software and AI features. The company is expected to show steady growth in both revenues and profits. Its broad product lineup and global presence give it a solid base.

Click here to know how Salesforce’s overall fiscal fourth-quarter results are likely to be.

AI and Cloud Strength Drives Salesforce’s Growth

Salesforce remains one of the strongest names in enterprise software because its cloud-based model fits right into today’s work environment. Remote and hybrid setups made cloud tools essential, and now AI is the new differentiator.

AI is becoming a key growth lever. Salesforce’s analytics and generative AI tools help clients automate workflows, improve customer targeting and forecast sales. These features not only attract new customers but also encourage existing ones to upgrade plans.

The company offers a wide range of products, from sales and marketing tools to commerce and customer service platforms. This variety helps it stay steady, even when some industries cut back on software spending. AI adoption is still in its early innings, and Salesforce looks well-positioned to capture long-term demand.

For the fiscal fourth quarter, the company expects total revenues between $11.13 billion and $11.23 billion (midpoint at $11.18 billion). The Zacks Consensus Estimate for fourth-quarter revenues is pegged at $11.17 billion, which indicates an increase of 11.7% from the year-ago quarter’s reported figure.

Cost Cuts to Aid Salesforce’s Profitability

One of the most important changes at Salesforce over the past year has been its push for better profitability. Through cost-cutting, staff reductions and improving how it operates, the company has been able to increase earnings, even with slower revenue growth.

Even if deal sizes shrink a bit, Salesforce’s ability to control costs puts it in a good position to grow profits. Its leadership in the customer relationship management space, combined with opportunities to upsell AI tools to existing customers, should help the company continue improving its margins over time.

CRM anticipates non-GAAP earnings per share in the band of $3.02-$3.04 for the fourth quarter. The consensus mark for non-GAAP earnings has remained unchanged at $3.03 over the past 60 days, which indicates a 9% increase from the year-ago quarter’s level.

Salesforce’s Zacks Rank and Stocks to Consider

Currently, CRM carries a Zacks Rank #2 (Buy).

Analog Devices ADI, Amphenol APH and Monolithic Power Systems MPWR are some other top-ranked stocks that investors can consider in the Zacks Computer and Technology sector. Analog Devices sports a Zacks Rank #1 (Strong Buy), while Amphenol and Monolithic Power Systems each carry a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Analog Devices’ fiscal 2026 earnings has moved upward by 9.4% over the past seven days to $10.90 per share, calling for an increase of 39.9% year over year. Analog Devices shares have climbed 41.9% in trailing 12 months.

The Zacks Consensus Estimate for Amphenol’s full-year 2026 earnings is pegged at $4.32 per share, revised upward by 8 cents over the past 30 days and suggests a year-over-year rise of 29.3%. Amphenol shares have soared 113% over the past year.

The Zacks Consensus Estimate for Monolithic Power Systems’ fiscal 2026 earnings has been revised upward to $21.63 per share from $21.07 over the past 30 days. Monolithic Power Systems shares have surged 57.9% over the past year.

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

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