Shares of Salesforce climbed in premarket trading.
Shares in Salesforce rose after the software company beat Wall Street estimates for its second quarter. Strategists say it's thanks to an embrace of artificial intelligence.
Its stock (CRM) climbed over 11% in premarket trading on Thursday, having posted financial results after Wednesday's close. The extended-hours move, if it carries over to the U.S. session, would mark the largest post-earnings surge in two years, according to Dow Jones Market Data.
Salesforce said revenue reached $11.35 billion in the three month period ended July 31, just surpassing expectations of $11.33 billion. It posted earnings per share of $5.90, versus forecasts for $3.27.
Citigroup raised its price target for the stock from $204 to $233. "We give Salesforce credit for directly confronting the AI-driven SaaS disruption narrative and embracing a more open through Anthropic, Headless, MCP and other third-party interfaces," strategists at the bank, led by Tyler Radke, wrote in a note.
A large part of Salesforce's earnings gain comes from its investment in Anthropic, which first began during the artificial-intelligence company's Series C funding round in 2023. The customer-relationship management platform also announced that it was extending its relationship with Anthropic on Wednesday through "Claudeforce," a project to integrate the latter's Claude into its products.
Jefferies also lifted its price target for Salesforce, increasing it from $250 to $300. Analysts led by Brent Thill said they were impressed by the company's growth of 14% in current remaining performance obligation - which measures the revenue expected to be recognized in the next year. They said it could rise even higher if Salesforce's acquisitions of Contentful and Fin close in the upcoming weeks.
The analysts were also excited by former senior employees deciding to return to the company from frontier AI labs, its Dreamforce conference taking place in three weeks, which could deliver more updates, and revenue growth at Salesforce's Agentforce arm.
Cantor kept its price target of $250 in place for the stock. Analysts led by Matthew VanVliet wrote in a note on Thursday that they see Salesforce's growing collaboration with Anthropic as a positive catalyst for shares.
"We think this partnership sends a broader message, which is that LLMs [large-language models] are not displacing SaaS [software as a service] SoRs [systems of record], but rather choosing to partner deeply with them," they wrote, referring to the relationship as a "first-of-its-kind."
-Nora Redmond