Salesforce (NYSE:CRM) has long been a dominant player in the customer relationship management industry. As artificial intelligence (AI) reshapes how businesses operate, CRM stock finds itself at the center of this transformation. With strong financial performance, new product launches, and ongoing acquisitions, Salesforce is positioning itself as both a technology leader and a long-term investment opportunity. Still, the stock has had its ups and downs, leaving investors to wonder if 2025 will be the year CRM stock regains momentum.
Salesforce’s Financial Strength Remains Solid
At a market cap of nearly $240 billion, Salesforce is still the largest CRM platform in the world. In its most recent quarter, revenue reached $10.25 billion, up 10% year-over-year. Subscription and support revenue, which forms the bulk of sales, grew 11%. Earnings per share rose 33% to $1.96, showing that the company’s margin discipline is paying off.
The company’s remaining performance obligations (RPO) climbed 11% to $29.4 billion, offering visibility into future growth. Meanwhile, its AI and Data segment grew 120%, underscoring how critical artificial intelligence has become for Salesforce. With adjusted operating margins improving to 34.3%, CRM stock is supported by consistent profitability.
Salesforce Bets Big on AI and Data
Salesforce’s strategy is heavily centered on AI adoption. Its Agentforce platform, designed to provide AI agents that assist human workers, already has over 6,000 paid deals. Data Cloud, the backbone of Salesforce’s AI-driven strategy, is valued at $7 billion and has seen customer adoption rise 140% year-over-year.
High-profile customers such as FedEx (NYSE:FDX), Dell Technologies (NYSE:DELL), Marriott International (NASDAQ:MAR), and Pfizer (NYSE:PFE) are leveraging Salesforce tools to streamline operations and boost efficiency. For example, FedEx has reported a double-digit improvement in customer onboarding thanks to Salesforce’s Data Cloud automation.
Expansion Through Acquisitions and Shareholder Returns
Salesforce has recently acquired Convergence.ai, Bluebirds, and Y to strengthen its AI capabilities. It also plans to finalize its acquisition of Informatica (NYSE:INFA) by fiscal 2027, which should further boost its data analytics offerings.
At the same time, Salesforce continues to reward shareholders. The company returned $2.6 billion through dividends and buybacks in the latest quarter, bringing its lifetime total to nearly $27 billion. Its board also authorized a new $20 billion share repurchase program, signaling confidence in long-term growth.
Guidance and Valuation Outlook
For fiscal 2026, Salesforce expects revenue between $41.1 billion and $41.3 billion, representing growth of 8.5% to 9% year-over-year. Analysts are slightly more optimistic, projecting 8.8% revenue growth and an 11.2% increase in earnings. Looking ahead to fiscal 2027, estimates call for 9.1% revenue growth and 12% earnings expansion.
Trading at 19 times forward 2027 earnings, CRM stock appears reasonably valued for a tech giant with consistent free cash flow growth. With capital expenditures below 2% of revenue, free cash flow is expected to rise 12% to 13% annually.
Wall Street’s Take on CRM Stock
Analysts remain bullish on Salesforce. Out of 50 analysts, 36 rate CRM stock a “Strong Buy,” with only one rating it a “Strong Sell.” The average price target of $336.06 suggests a 34% upside, while the high target of $430 implies the potential for a 71% rally over the next year.
Final Thoughts: Can Salesforce Stay on Top?
Salesforce has proven it can adapt by expanding into AI-driven services while maintaining its leadership in CRM software. With robust financials, strong adoption across industries, and continued innovation, CRM stock remains a market leader going into 2025. The challenge will be maintaining that edge as rivals in AI and cloud computing grow stronger. For investors, Salesforce offers both stability and growth potential—making it one of the most closely watched tech stocks of the year.
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