Morgan Stanley Raises Price Target on Salesforce Amid Strong Earnings and New AI Partnership
Salesforce (CRM) shares surged over 22% following a strong earnings report and an expanded partnership with Anthropic. The company reported an $87% year-over-year increase in net income, largely driven by a $2.6 billion paper gain from its stake in AI firm Anthropic. While the stock rally was fueled by this investment windfall and new product announcements like Claudeforce, Morgan Stanley noted that actual revenue beat Wall Street estimates by only about $20 million. Morgan Stanley analysts raised their price target for Salesforce to $235 from $185 but maintained an Equal-weight rating. The firm highlighted stronger-than-expected growth in current remaining performance obligations (cRPO), which rose 14% and exceeded guidance, as a sign of improving demand. Additionally, Salesforce's retention rates remained near record lows despite fears that AI-native competitors could disrupt its business model. The company also reported increased contract lengths and higher net new average order values—indicating strong customer acquisition rather than just renewals. These metrics suggest sustained interest in Salesforce’s offerings even as the market shifts toward AI-driven solutions.
Topics: AI Partnership Analyst Report Earnings Stock Movement