Salesforce Inc. (CRM) shares surged in early trading Thursday after the company reported upbeat fiscal second-quarter results, and analysts were quick to cheer the numbers. The stock jumped 22.03% to $250.91 at the time of publication, as the market digested a quarter that many say puts to rest the so-called 'SaaSpocalypse' narrative.
Here's a rundown of what analysts are saying:
- BTIG analyst Allan Verkhovski reiterated a Buy rating, raising the price target from $255 to $300.
- DA Davidson analyst Gil Luria reiterated a Neutral rating, lifting the price target from $175 to $200.
- Guggenheim Securities analyst John DiFucci reiterated a Buy rating, raising the price target from $228 to $270.
- Needham analyst Scott Berg reaffirmed a Buy rating and price target of $400.
- Cantor Fitzgerald analyst Matthew VanVliet reiterated an Overweight rating and price target of $250.
BTIG: A 'Narrative-Changing Quarter'
BTIG's Verkhovski called the results "clean," highlighting a constant currency revenue beat of $76 million, accelerating cRPO growth, the strongest NNAOV growth in four years, and attrition at near historic lows. He wrote that this was "a narrative-changing quarter," pairing strong financials with "a clearer message that the company is well-positioned and still in the early innings of benefiting from AI." The company also raised its organic revenue guidance for fiscal 2027 by $100 million, which Verkhovski noted.
DA Davidson: Modest Beat, AI Tailwinds
DA Davidson's Luria noted that total revenue of $11.345 billion came in above consensus of $11.326 billion. While constant currency revenue grew 11% year-on-year, that figure drops to 6.4% when excluding Informatica contributions, a deceleration from 8.7% in the prior quarter. Management raised full-year total revenue guidance to $46.1-$46.4 billion, up from $45.9-$46.2 billion, implying around 11% growth. Luria attributed the share rally to the earnings release, the launch of "Claudeforce" through an expanded partnership with Anthropic, and usage metrics suggesting Salesforce is benefiting from rising adoption of its AI offerings.
Guggenheim: Dispelling SaaSpocalypse
Guggenheim's DiFucci said the results "went a long way" in dispelling SaaSpocalypse concerns, which revolve around fears that AI and autonomous agents could disrupt the traditional Software-as-a-Service model. The company not only beat most estimates but also raised its annual guidance by more than the beat. Constant currency cRPO growth of 14% year-on-year exceeded consensus of 13%, driven by strong bookings and near record-low attrition. NNAOV growth was the strongest in four years, keeping the company "on track for second half organic revenue reacceleration," DiFucci wrote.
Needham: Big EPS Beat, Claudeforce as a Counterpoint
Needham's Berg highlighted that revenue of $11.345 billion and non-GAAP earnings of $5.90 per share beat his estimates of $11.301 billion and $3.26 per share, respectively. RPO came in at $66.3 billion, representing 11% year-on-year growth. Berg wrote, "We view Salesforce's expanded Anthropic partnership and launch of Claudeforce as a meaningful counterpoint to broader 'SaaSpocalypse' concerns." Management raised fiscal 2027 revenue guidance to $46.1-$46.4 billion, implying 11.4% growth at the midpoint.
Cantor Fitzgerald: Flipping the Dynamic
Cantor's VanVliet said the Q2 results "help quell" concerns about whether growth can reaccelerate in the second half. He described Claudeforce as "the first-of-its-kind partnership with large enterprise SaaS," noting that it brings Salesforce's data inside Claude, allowing users to query data and have agents execute it. "This new arrangement flips the dynamic," he wrote.
With analysts broadly raising price targets and lauding the company's AI positioning, Salesforce appears to have turned a corner, leaving the SaaSpocalypse fears in the rearview mirror.
