Anthropic gave Salesforce's stock a boost. Following the earnings report, the stock soared more than 11%.
Salesforce's stock surge was driven by the integration of Claude and paper gains from investments in Anthropic
Salesforce's increased stake in Anthropic led to a sharp rise in the company's profits last quarter / Photo: Ian Dewar Photography/Shutterstock.com
Shares of U.S.-based Salesforce, the market leader in customer relationship management (CRM) systems, surged as much as 14% in after-hours trading in New York following the close of the regular session on August 26. According to Dow Jones Market Data, this is Salesforce’s strongest earnings-driven price reaction since August 2024, when the stock rose 26%, MarketWatch reports. In pre-market trading in New York on August 27, the gain slowed to 11%.
The rise in optimism on Wall Street was driven not only by a strong quarterly report: Salesforce raised its revenue guidance and announced an expanded partnership with Anthropic. Salesforce needed not only to deliver results above expectations but also to convince investors that AI is not “eating into” its business, according to Rebecca Wettemann, an analyst at Valoir, as quoted by Bloomberg.
Claude and "Paper" Profits
Salesforce has announced Claudeforce—a new initiative that expands on the partnership with Anthropic launched in June. It will integrate the Claude chatbot with Salesforce products. According to Bloomberg, sales representatives will be able to use Claude to retrieve customer information and sales progress data from Salesforce.
Allowing customers to access Salesforce data through Claude is expected to boost revenue for both companies’ services. Salesforce also expects the integration to encourage customers to upgrade to higher-tier plans, Mike Spencer, Salesforce’s chief financial officer, told Bloomberg.
Anthropic had an impact on Salesforce’s quarterly results and as an investment. Salesforce has been an investor in Anthropic since 2023, and the “paper” profit from its stake in the startup boosted Salesforce’s adjusted earnings to $5.90 per share, compared to a consensus estimate of $3.27. Excluding investment income, the figure would have been just $3.37, according to MarketWatch.
Salesforce reported that recurring revenue from Agentforce and Data 360 grew by more than 210% year-over-year. And CEO Marc Benioff cited “incredible demand” for AI products and data tools.
The contract portfolio has grown
The value of signed contracts—which are expected to generate revenue for Salesforce over the next 12 months—reached $33.5 billion, compared with Wall Street’s forecast of $33.4 billion. The figure rose 14% year-over-year, following 13% growth in each of the previous two quarters, according to MarketWatch.
Jeffrey Favuzza, an analyst with Jefferies’ trading division, cited the acceleration in order book growth as one of the report’s key positive signs. According to Robin Washington, Salesforce’s chief financial and operating officer, the net order backlog reached a four-year high.
Salesforce is poised for growth
Salesforce reported that it expects revenue of $11.42 billion to $11.5 billion in the third fiscal quarter, compared with the FactSet consensus estimate of $11.415 billion. The company raised its full-year forecast from $45.9 billion to $46.2 billion to $46.1 billion to $46.4 billion, while market expectations stood at $46.1 billion, according to MarketWatch.
According to Washington, the upward revision to the forecast reflects growth at Agentforce, Data 360, and Slack, which offsets the ongoing volatility in license revenue. It also factors in the expected contribution from the acquisition of the digital content creation platform Contentful and the AI agent developer Fin—Salesforce expects to complete these acquisitions in the coming weeks, Reuters reports. At the same time, the company expects revenue to accelerate in the second half of the year even without taking the acquisitions into account, Bloomberg reports.
A Wave of Revisions
Salesforce's quarterly report triggered a wave of revisions to the company's stock price targets among investment banks. On August 27, Jefferies raised its price target for the IT giant’s shares from $250 to $300 with a “Buy” rating, Goldman Sachs revised its target from $242 to $271 (also “Buy”), while RBC raised its target from $210 to $250, maintaining a neutral rating. According to S&P Global, the current consensus among 53 analysts covering Salesforce is “Buy.” Their average price target of $242.60 per share is 18% above the closing price on August 26.
This article was AI-translated and verified by a human editor
