Salesforce Earnings Set to Test Analyst Confidence in AI-Driven Growth

Salesforce is set to report its earnings after the US market close, and investors are eagerly awaiting the results. The company's AI product blitz has been a major focus for analysts, but some warn that expectations may be too high.

Five separate analyst houses have raised their price targets on Salesforce in the past week, with BMO Capital increasing its target from $215 to $230 and UBS moving from $185 to $210. However, most of these firms remain anchored at Neutral or Equal Weight ratings, indicating that they do not necessarily believe the stock is worth materially more than it was a month ago.

The metric that will truly define today's report is the remaining performance obligation (RPO), which stands at $33.6 billion and represents 14 percent year-over-year growth. If Salesforce can demonstrate accelerated order growth, the more optimistic targets may hold their ground. However, if RPO growth disappoints, the shares could feel the sting.

Salesforce has been busy in the run-up to its numbers, unveiling a wave of technical innovations aimed at cementing its position in enterprise AI. The company launched Slack Code, which enables collaborative software development directly within the messaging platform, and expanded its Headless 360 environment with new Model Context Protocol (MCP) servers and enhanced Data 360 capabilities.

The departure of Srini Tallapragada, Salesforce's former president and chief engineering and customer success officer, has also been a point of focus. While some see this as part of a broader reorganization around the company's AI priorities, others may view it as a sign of uncertainty rather than clarity.