Cramer says ‘the old Salesforce is back’ after new targets point to faster growth
Salesforce struck back. The business software maker on Wednesday unveiled an optimistic, multiyear financial roadmap that rejects the sluggish-growth narrative that has been dogging the stock. “It’s the old Salesforce, and I’ve been waiting for the old Salesforce,” Jim Cramer said Thursday morning on CNBC. Shares of Salesforce are up more than 4% Thursday on the news. At its influential Dreamforce conference this week, Salesforce projected annual revenue of $60 billion for the fiscal year 2030, excluding its pending Informatica acquisition . That is above the LSEG consensus of $58.4 billion. And crucially, Salesforce said its outlook translates to average annual organic revenue growth of at least 10% in fiscal years 2026 to 2030 — a pace of expansion the company has struggled to reach in recent quarters. Salesforce reported its fiscal 2026 second-quarter results last month. Salesforce also rolled out long-term plans for adjusted operating margins and subscription revenue growth on a constant-currency basis. By the end of fiscal 2030, the company expects those two metrics, when added together, to reach 50 — a nod to the “Rule of 50” that tech investors use to evaluate software companies. When activist pressure at Salesforce started in the fall of 2022, the company was not even meeting the “Rule of 40,” a more modest version of the same rubric. With that milestone reached, the company is now set on getting to 50. “We can all do the math. We’re only going to spend a couple of years in the 40s. And we’re going to rapidly move into the 50s,” CEO Marc Benioff said at the investor day Wednesday night. Salesforce desperately needed the boost, as it works to recover from a nearly 30% slide this year and rebuild investor confidence . For most of the year, Salesforce shares have been weighed down by the notion that AI is a threat to the software-as-a-service business model. Alongside this was criticism that Salesforce was focusing too much on its agentic AI offering, Agentforce, and neglecting its core business applications used by marketing teams, customer service reps, and salespeople. While Salesforce executives have repeatedly pushed back against these claims, the market had its doubts. So, too, did the Club . And there are still skeptics, despite the rosier guidance. “We believe the FY30 goals are ambitious, and it is hard to see how they can accomplish them without a significant improvement to the external spend environment,” D.A. Davidson’s Gil Luria wrote to CNBC in an email on Thursday. “With most of its businesses still decelerating, something dramatic would have to change for the company to reaccelerate growth,” argued Luria, who has a hold-equivalent rating on the stock. However, the new targets soothed Jim’s concerns. “What we heard was that the old business is doing well,” Jim said. “People are not canceling the product. The new [Agentforce] business is just starting to inflect in the next 12 to 18 months, going back to double digits, so it will return to its old growth strength.” “That’s why you’re seeing something as strong as this [stock] move, because it really defeats the bearish case,” added Jim, who was in San Francisco this week to attend Dreamforce. In a mission to prove the naysayers wrong, Dreamforce showcased a slate of well-known clientele, including Dell , Williams-Sonoma , and FedEx , with all speaking favorably of Salesforce’s Agentforce technology. Agentforce allows customers to build AI applications that are capable of taking action and accomplishing tasks with minimal human supervision. Salesforce charges for Agentforce on a consumption-based model, versus seat-based licenses for its traditional apps. “People aren’t canceling. They want both. They want the optionality of having the old business and they’re paying the same, and they want this new consumption business without hurting their old business,” said Jim, citing comments on Wednesday night from Salesforce’s chief revenue officer, Miguel Milano. It appears that Dreamforce has yet again been what the company needed for a positive turn. Last year’s conference, during which Salesforce introduced Agentforce, was the beginning of a multi-month rally that sent the stock to a series of all-time highs, before peaking in early December at roughly $368 a share. In response to this year’s Dreamforce, both Barclays and Goldman Sachs analysts reiterated buy ratings on the stock. “Through a year of iterations since Agentforce’s initial launch in September 2024, we believe Salesforce’s latest innovations reaffirm its technical readiness to drive broader AI and agent adoption at enterprise scale,” Goldman wrote to clients. Jim entered this week in search of clarity on Salesforce’s prospects. Based on everything he heard in the Bay Area, he said he believes the bears will ultimately be proven wrong now that Salesforce has had time to refine its AI strategy. “The numbers are coming. It’s inflecting within a timeframe that you want to be in on the stock.” (Jim Cramer’s Charitable Trust is long CRM. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . 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