Salesforce (NYSE:CRM) has surged into a strong rally this month, pushing shares to their highest level since February. The stock is now up 43% from its 2026 low, tracking the broader rebound in software names. That momentum faces its biggest test yet when the company reports earnings later this week.
Salesforce Earnings to Provide More Information on its Growth
CRM stock has jumped in the past few weeks as investors have rotated back to software companies. This rebound continued last week after a report showed that Silver Lake was considering buying Workday (NASDAQ:WDAY).
Salesforce’s rally will be put to the test when it releases its earnings this week. These results are expected to provide more insights on whether its business is benefiting from the ongoing artificial intelligence boom.
The most recent results showed that Salesforce was seeing modest growth. Its revenue rose by 13% in the first quarter to $10.6 billion. This growth, however, was partly because of its Informatica buyout, which contributed $428 million.
The results also showed that its Agentforce and Data 360 annual recurring revenue (ARR) jumped by 200% to $3.4 billion. This ARR growth was also partly because of its Informatica business.
Salesforce has always been a highly conservative company in terms of its guidance, which explains why it often beats and raises. It predicted that its second-quarter revenue would be between $11.27 billion and $11.35 billion. A big earnings beat will be bullish for the stock.
In addition to its earnings, the company will likely comment on its share buyback plan. It returned $27.5 billion to shareholders through share buybacks and dividends and then initiated a $25 billion accelerated share repurchase program. That’s because management believes that the company is highly undervalued, with its forward PE ratio being 14.80.
Salesforce Stock Sits at a Crucial Resistance Ahead of Earnings
The daily chart reveals that the CRM stock has soared in the past few months and is now at a crucial resistance level of $210. This is an important level because it was its highest level on June 1 this year.
The stock is also about to form a golden cross pattern as the spread between the 50-day and 200-day Weighted Moving Averages (WMA) cross each other. Such a move will confirm the bullish outlook.
Therefore, the stock may jump to the key resistance level of $222.06, its lowest level in November last year. However, there is also a risk that it drops to $200 if the earnings and guidance are not all that strong.
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