Salesforce stock has become cheap: will it rebound after earnings?

Salesforce stock price continued its strong downward trend this week, reaching its lowest level since March 2023. CRM dropped to $178, down by over 50% from its highest level in 2025, with its market capitalization falling from $378 billion to the current $166 billion, as focus shifts to the upcoming financial results.

Salesforce stock tumbles amid AI threat risk 

The CRM stock price has slumped in the past few months, moving from a record high of $366 to the current $178. This crash accelerated in the past few months as concerns about the impact of artificial intelligence on software companies rose.

The fears continued rising this week after some notable experts warned about the AI industry. In a statement on Monday, the head of the $1.7 trillion Franklin Templeton, warned that enterprise software companies face elevated risks in the future. Citrini Research has also warned that software companies will continue struggling in the near term as models become more advanced.

Software companies like Salesforce have pushed back against these fears, and to some extent, this view is correct as some solutions are hard to disrupt. For example, Salesforce owns Slack, a corporate communication tool that can't be replaced by AI tools. Instead, AI can help to complement the services offered by some of these companies.

The next important catalyst for Salesforce's stock price will be its earnings, which will come out on Wednesday this week. These results will provide more information about its growth and the performance of its business.

Data compiled by Yahoo Finance shows that the average revenue estimate is $11.19 billion, up by 11% YoY. This revenue growth will likely be because of its recent acquisitions.

The annual revenue will come in at $41.50 billion, up by 9.48% YoY. Also, the annual revenue will grow to $46 billion in 2026, up by 10.8%.  Salesforce tends to be highly conservative, which means that its real results will be much better than expected.

The most recent results showed that Salesforce's business did moderately well in the third quarter, with its revenue rising to $10.3 billion. This group happened as it added companies like CVS, Costco, and Accenture as clients.

There are signs the ongoing Salesforce stock prices has become a bargain, with its forward price-to-earnings (PE) ratio of 15, much lower than the sector median of 22. Its forward PEG ratio has moved to 0.88, down from the sector median of 1.43.

The same is happening in terms of its Rule-of-40 multiple, which looks at a company's revenue growth and profit margin. Salesforce’s business is growing at about 12%, while its EBITDA margin is 30%, giving it a multiple of 41%.

CRM stock price technical analysis 

The weekly chart shows that the CRM stock price has retreated in the past few months, moving from a high of $366 in December 2024. 

It formed a head-and-shoulders pattern, a popular bearish continuation sign in technical analysis. It has already moved below the neckline at $225.

The stock has formed a death cross pattern, which happens when the 50-week and 200-week Exponential Moving Averages (EMA) cross each other.

Also, the Relative Strength Index (RSI) and the Percentage Price Oscillator (PPO) have continued falling. 

Therefore, the most likely Salesforce stock price forecast is bearish, with the initial target being $150. In the future, however, the stock will likely bounce back, and possibly to the key resistance level at $225.