Salesforce Stock Is Coiled Like a Spring and Ready to Rebound

Key Points

• Salesforce's Q3 results affirm that its AI strategy is sound and provides incentives for businesses to accelerate AI adoption.
• Strong cash flow continues to grow in Q3, supporting a robust capital return outlook.
• Market dynamics suggest a robust rebound lies ahead and may begin before the year's end.

An examination of Salesforce’s NYSE: CRM stock price chart reveals a market coiled up like a spring.

On the one hand, its blue-chip quality, tech-growth business is healthy and commands broad-based market support.

On the other hand, concerns about its AI strategy and growth outlook have compressed price action, which shows solid support at the bottom of a range in December 2025, along with indications of inherent market strength. 

The two signals of most interest are the divergences in stochastic and MACD on the weekly price action chart. Divergences such as these, when price action hits a new low, and the indicators do not follow, reveal that bears have lost control of the action and the bulls are now in charge.

At the same time, these indicators are set up to fire strong bullish signals, which the early, pre-market action following the Q3 release has confirmed. The question is whether the market will follow through on the signal and the Q3 results and guidance update suggest it will. 

Q3 Earnings Reflect Accelerating Adoption of AI Applications

Salesforce’s Q3 results and guidance update are significant for numerous reasons, including their strength and the impact on adoption. Adoption is a crucial factor for AI applications globally, including those by Salesforce, and the results reveal not only acceleration but also likely accelerate it on their own merits.

While revenue came in as expected at $10.28 billion, up 8.7% year-over-year (YOY), margins expanded significantly, driven by AI's impact on Salesforce’s business and operations. It is its own poster child; using AI will improve profitability.

Internal metrics are also solid. The core Subscription and Support business grew by 10%, driven by the adoption of AI applications and increased agent utilization. Agentforce and Data 360's annual recurring revenue increased by 114%, with a 330% increase in Agentforce, driven by new and existing clients. The client mix is another signal of Salesforce increasing momentum, with 50% of Agentforce deals attributed to existing clients expanding their usage.

Regarding the remaining performance obligation (RPO), it indicates accelerating business in upcoming quarters, having risen by 12% compared to the 9% revenue gain. 

Margin and earnings are also accelerating, affirming the company’s long-term profitability goals. The critical takeaways from Q3 are that operating cash flow grew 17% compared to the 8.7% top-line advance, with free cash flow running at 95% of cash flow and up 22% YOY.

Looking ahead, the company expects these strengths to continue, issuing better-than-expected guidance with EPS targets well above MarketBeat’s reported consensus. Analysts are targeting $11.38 in adjusted full-year earnings, the company expects closer to $11.75 and is likely cautious in its estimates.  

Salesforce Analysts Signal a Bullish Shift in Sentiment Trends

Salesforce analysts never turned bearish on the stock, but a series of price target reductions was sufficient to cap gains and pressure the market in 2025.

The post-release activity includes numerous reaffirmed or reiterated ratings and price targets, signaling that the sentiment downdraft is over.

That said, as of early December, the consensus of 39 analysts is a Moderate Buy with a forecast for 35% upside. A move to the consensus is sufficient to put this market above its critical moving averages and resistance targets, near the high end of its trading range, and within spitting distance of a record high. 

Institutions have been accumulating CRM stock throughout 2025, providing solid support for the market, and are unlikely to change their habits soon. The company’s outlook is improving, including its profitability, which drives significant cash flow and free cash flow.

The free cash flow is a fundamental factor underpinning the stock price outlook, as it enables capital returns. The dividend is a token, yielding only 0.7% with shares at long-term lows. Still, the buybacks are more substantial, having reduced the share count by 1.3% for the quarter and year-to-date, and are expected to continue in the current quarter and upcoming year.