Salesforce shares rose 2.5% to $258.48 after the company delivered a second quarter that exceeded expectations and lifted its full-year subscription revenue forecast, signaling that the year-long slump driven by fears of an AI-led SaaS collapse may have found a floor. The move matters because it brings institutional money back into a $40 billion revenue business that had been treated as a melting ice cube.
The year of the ice cube
The stock had trended lower for more than a year, hitting long-term lows in 2026 as growth slowed and a narrative took hold that generative AI would cannibalize the customer relationship management franchise. Sluggish top-line expansion is hard to overcome even at this scale; billions in absolute growth translate to only modest percentages on a $40 billion base.
The numbers that shifted sentiment
Second-quarter net revenue came in at $11.35 billion, edging past consensus with subscription and services rising 12%. Annual recurring revenue approached $40 billion, up 210% year over year, while Agentic Work Units, a measure of agentic traffic, jumped 97% sequentially. Adjusted earnings per share reached $5.90, more than $2.60 above forecasts, as adjusted net income more than doubled. Operating margins held stable, and cash from operations alongside free cash flow remained ample enough to fund growth and shareholder returns.
The fine print on profitability
The profit beat carried significant one-time help. Pre-tax investment gains added billions to the bottom line, amplified by a share count that fell roughly 12.5% on average through the first fiscal half. The company bought back little stock in the quarter but retains ample authorization; the expectation is that repurchases resume in the second half and continue into next year as revenue converts to cash.
Guidance and the analyst pivot
Management raised the full-year subscription revenue outlook, citing organic strength and completed tuck-in acquisitions, with two more expected this quarter. The analyst response was uniformly bullish: the 47 analysts tracked by MarketBeat show a 57% buy-side bias and a rising price-target trend. The consensus 12-month target sits at $261.15, barely above the current price, but the high-end target now stands at $400, a new high. Pre-release, the street had priced in roughly 20% upside; the post-print reaction suggests the bottoming process is more about sentiment repair than immediate multiple expansion.