Salesforce (CRM) stock has traded mostly sideways in recent sessions as investors await the firm’s fiscal Q2 earnings, due after the market closes on August 26th.
Consensus is for CRM to record $11.32 billion in revenue and $3.27 per share of earnings (EPS), representing about 11% and 12% growth on the top and bottom lines.
The earnings event comes at a time when Salesforce shares have already regained investor interest, with the price up about 35% from its recent low.
What Salesforce stock needs to rally after earnings
Given its recent gains, simply beating the Q2 consensus may not be enough to trigger a sustained rally in CRM stock.
Investors increasingly want evidence that the company can reaccelerate its organic growth while monetizing its artificial intelligence (AI) investments.
Management previously pointed to stronger organic growth in the back half of fiscal 2027, making forward guidance particularly important.
One key metric the market will watch closely is current remaining performance obligations, or CRPO, which analysts believe will grow over 13% to about $33.41 billion.
A stronger-than-expected figure would suggest robust future demand for Salesforce’s subscription products.
Investors will also want clearer evidence that Agentforce is translating customer interest and trials into meaningful commercial adoption.
If Salesforce can show that AI is adding to its existing business rather than accelerating disruption fears, the earnings report could provide the catalyst needed for CRM to rip higher through the rest of 2026.
Options pricing is bearish heading into Q2 earnings
Interestingly, the options market doesn’t currently believe that Salesforce’s management would be able to deliver on those fronts.
According to Barchart, the put-to-call ratio on contracts expiring August 28th sits at 1.06 currently, which indicates a bearish skew heading into the quarterly release.
And the lower price on those contracts is set at $193, indicating potential for a more than 6% post-earnings decline.
What’s also worth mentioning is that CRM’s relative strength index (RSI) already sits in the mid-60s, indicating the stock is already approaching overbought territory that often triggers a sell-off in the near-term.
How to play CRM shares at current levels?
Salesforce shares enter the earnings call with a considerably lower valuation than it carried during its 2025 highs, giving the company more room to surprise investors if its operating performance improves.
CRM stock remains roughly 20% below its year-to-date high of $266 – despite the sharp recovery from its June trough – but the broader AI transition remains the central question for the investment case.
Salesforce has the advantage of a massive installed enterprise customer base, proprietary business data and a broad software ecosystem, but investors need to see those advantages translate into durable financial growth.
The firm’s ability to expand AI-related revenue without sacrificing its core subscription business could therefore matter more than a modest quarterly earnings beat.
With Wall Street’s average target near $252, the potential reward remains considerable, but the August 26 report will likely determine whether investors are willing to assign CRM a higher valuation again.
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