Salesforce (CRM) Has a $315 Bull Case, but Earnings Need to Prove One Thing

Citizens is heading into Salesforce Inc. (NYSE: CRM )'s fiscal second-quarter 2027 print with a bullish view. The firm reiterated a Market Outperform rating on the stock with a $315.00 price target, citing positive industry checks. As per the firm, 50% of checks came positive in Q2 compared to 22% in the first quarter of fiscal 2027.

However, the stock is down more than 19% year-to-date, entering the print as one of the most beaten-down stocks in tech. Against this backdrop, improving channel checks serve as a meaningful positive against a market that has been weighed down over concerns around AI agent economics and cash flow.

Bull Case: Better Checks, Stronger AI Momentum

Salesforce came under the brunt of a massive sector-wide selloff amongst software-as-a-service (SaaS) companies, dubbed the "SaaSpocalypse." Investors believed that AI would take business away from SaaS enterprises such as Salesforce. However, the stock's recent results have been challenging the most bearish version of this thesis.

For the fiscal first quarter, the company reported a record revenue of $11.1 billion, up 13% year over year. This strong start led it to raise its full-year revenue forecast to a range of $45.9 billion to $46.2 billion. Its AI metrics also moved well, with annualized revenue from Agentforce reaching $1.2 billion, up 205% year over year. Previously, Agentforce had been struggling and making less than a billion in ARR.

Meanwhile, bookings for Agentforce One edition and Agentforce for Apps grew almost 60% year-over-year. Its CRPO (Current Remaining Performance Obligation), a key forward demand indicator, was $33.6 billion, up approximately 14% nominal and 13% in constant currency.

BTIG analyst Allan Verkhovski also cited some positives ahead of the print, including signs of renewed customer interest in core Sales Cloud deployments, and CRM closing a large deal with a utilities company that moved to an unlimited credit license.

Citizens channel checks therefore arrive at a crucial time, with the bull case easier to defend if they manage to translate into better bookings and guidance.

Bear Case: Headline Growth Rate May Be Misleading

The stock is entering its Q2 print with expectations of total revenues between $11.27 billion and $11.35 billion (midpoint at $11.31 billion). While the management is guiding for reported revenue growth of 10% to 11%, just over four percentage points of this is going to come from Informatica. Stripping out this acquisition benefit implies Salesforce hasn't actually returned to a double-digit growth rate as being implied.