Is Salesforce (CRM) Stock a Buy After Its Biggest Beat in Years?

TLDR

• Salesforce posted Q1 FY2027 revenue of $11.13 billion, up 13% year-over-year, its best quarterly growth since Q1 2023
• Adjusted EPS of $3.88 beat Wall Street’s estimate of $3.12 by nearly 24%
• Agentforce ARR hit $1.2 billion in Q1, up 205% year-over-year
• Salesforce announced a $2 billion investment in France through 2030, including a new AI Innovation Hub in Paris
• CRM trades at roughly 14x forward earnings, below the broader market median of ~18x, with a $25 billion buyback program underway

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Salesforce (CRM) jumped 9.68% after reporting Q1 FY2027 results that caught Wall Street off guard. The stock had been under pressure all year, with bears arguing that AI would erode demand for traditional software. The numbers told a different story.

Salesforce, Inc., CRM

Revenue came in at a record $11.13 billion, up 13% year-over-year. That beat consensus and marked the strongest quarterly growth rate since Q1 2023.

Adjusted earnings per share hit $3.88, crushing the Street’s estimate of $3.12 by nearly 24%. That’s the kind of beat that forces short sellers to reassess quickly.

The headline AI number was Agentforce, Salesforce’s autonomous AI platform. It crossed a $1.2 billion annualized recurring revenue run rate in Q1 alone, growing 205% year-over-year.

Combined with Data Cloud, the AI and data segment reached $3.4 billion in annualized revenue. That’s not a side project — it’s becoming a core part of the business.

Backlog and Buybacks Point to Durable Growth

Current remaining performance obligations grew 14% to $33.6 billion. Total RPO reached $67.9 billion. Those numbers suggest customers are signing longer, larger deals — not cancelling them.

Data Cloud ingested 52 trillion records in Q1, up 136% year-over-year. The scale of that data activity helps explain why clients stay embedded in the platform.

On the capital return side, Salesforce has now deployed over $27 billion through its accelerated share repurchase program, retiring 103 million shares at an average price of $262.14. That’s roughly 10% of the diluted share count gone in a year.

In Q1, the company launched a fresh $25 billion buyback. At a stock price around $209.60 at the time of reporting, that’s aggressive capital deployment at a depressed valuation.

Analysts and Cramer Still See Upside

TD Cowen reiterated a Buy rating and a $250 price target on May 22, citing strong demand in the data cloud sector. The Wall Street consensus is a Moderate Buy, with an average price target of $246.87 — implying around 18% upside from recent levels.

Citi is more cautious. The firm cut its target to $188 from $200 in May and kept a Neutral rating, noting longer deal cycles and more renewals among partners.

The forward P/E sits at roughly 14x on consensus FY2027 EPS of $14.16. That’s below the broader market median of about 18x.

On the international side, Salesforce said it plans to invest $2 billion in France through 2030, which includes a new AI Innovation Hub in Paris and expanded workforce training programs.

The Slack Model Context Protocol, part of the new Headless 360 architecture, surpassed one million active users in its first six weeks after launch.

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