Salesforce (CRM) Stock Rebounds on AI Momentum: Is the 'Dog of the Dow' Now a 2026 Comeback Play?
Salesforce has looked broken for most of 2025. Then Q3 FY26 hit, AI showed up in the numbers, and the stock ripped about 13% on the week to close near $260.57 on December 5. That bounce doesn't erase the year: CRM is still down roughly 20-30% year to date, depending on your source and date stamp.
So we're in a weird spot. Fundamentals just improved, AI is adding real revenue, and the company is rewarding shareholders. Yet the chart still says "underperformer." Here's what changed-and what to watch if you're eyeing a 2026 rebound.
1) From "Dog of the Dow" to short-term winner
Salesforce has been tagged as one of the Dow's laggards in 2025, mainly due to slowing top-line growth and skepticism around its AI push. The week around earnings flipped the tone-shares spiked double digits, but they still trail software peers and longer-term moving averages.
Translation: sentiment just improved, the trend hasn't. 2026 will be about whether the numbers can keep forcing the market to re-rate the stock.
2) Q3 FY26: record results, better outlook
- Revenue: $10.3B, up 9% YoY (8% cc)
- Subscription & support: $9.7B, up 10% YoY (9% cc)
- Margins: GAAP op margin 21.3%; non-GAAP 35.5%
- Cash: Op cash flow $2.3B (+17%); FCF $2.2B (+22%)
- Guidance: Q4 revenue $11.13-$11.23B (+11-12%); FY26 revenue $41.45-$41.55B (+9-10%)
- Backlog: cRPO $29.4B, up 11%
- M&A: Informatica acquisition closed, expected to aid data integration and margins
The message is simple: Salesforce is a margin and cash-flow story now, not just a growth story. Guidance supports that shift.
3) AI: momentum vs. friction
AI finally hit the P&L in a way Wall Street can't ignore. But it's not smooth everywhere.
- Momentum: Agentforce + Data 360 ARR is nearly $1.4B (+114% YoY). Agentforce alone topped $500M ARR (+330% YoY). Over 18,500 Agentforce deals closed, including 9,500 paid deals (up 50% QoQ). The LLM gateway processed 3.2T tokens; Data 360 ingested 32T records (+119% YoY).
- Friction: Analysts still see accuracy, integration, and rollout challenges. Some customers report high total cost and complex deployments, with mixed adoption across older Einstein components.
Net read: AI is moving Salesforce's numbers now. The adoption curve isn't perfect, but revenue impact is visible-and growing.
4) What the Street thinks now
Despite a rough 2025, most analysts remain positive. Consensus ratings cluster around Buy/Moderate Buy, with average 12-month targets around the low-to-mid $320s-roughly mid-20% upside from ~$260. Several firms trimmed targets post-print but kept bullish ratings, signaling model updates, not thesis breaks.
Supportive, not euphoric. The market wants proof that AI growth can outrun decelerating legacy growth and justify the multiple.
5) Institutions, buybacks, and the new dividend
Institutions own roughly 80% of shares, and some are adding. In Q3 alone, Salesforce returned $4.2B to shareholders: $3.8B in buybacks and ~$395M in dividends. The quarterly dividend sits at $0.416 per share (~0.6% yield at recent prices).
That shareholder yield matters. Even with high single-digit to low double-digit revenue growth, buybacks and margins can keep EPS moving.
6) Long-term scenarios through 2030
Independent projections outline a path where CRM re-rates higher into the decade, with potential stock levels approaching the high-$400s by FY2030. The assumptions: expanding margins, durable AI/data revenue, and resilient competitive positioning.
The catch: those outcomes depend on execution. Competition is fierce (Microsoft, Oracle, SAP, ServiceNow, HubSpot, and AI-native upstarts), and any AI stumble could slow the flywheel.
7) Key risks to keep front and center
- Valuation: P/E in the mid-30s and PEG near 2.0 with ~10-11% revenue growth leaves little room for AI disappointment.
- AI execution/ROI: Accuracy, adoption, integration costs, and time-to-value are still debated by customers and partners.
- Competitive intensity: Rivals pitch cheaper, lighter, or more AI-native stacks-especially in revenue intelligence and GTM.
- Macro/IT budgets: Enterprise buyers can stall new bookings even if AI remains a priority.
- Leadership transitions: Finance leadership changes always get investor scrutiny.
- AI hype risk: Early Agentforce adoption lagged expectations; sentiment can swing if usage slows.
8) What to watch into 2026 (practical checklist)
- AI revenue proof: Agentforce + Data 360 ARR growth and paid-deal conversion, not just trials.
- Margins and FCF: Can non-GAAP margins hold mid-30s while AI scales and data investments continue?
- Pipeline quality: cRPO growth vs. bookings mix, renewal strength, and upsell rates.
- Informatica synergy: Evidence of faster integrations and cleaner data pipelines driving win rates.
- Competitive updates: Pricing moves from Microsoft and ServiceNow; new AI-native entrants in sales and service.
- Capital returns: Buyback pace and dividend trajectory as a buffer against slower top-line growth.
Short term, Salesforce delivered a clean beat and raise with margin strength and AI acceleration. Medium term, the Street sees mid-20% upside if execution holds. Long term, there's a bullish path-just not a guaranteed one.
This article is informational and not investment advice. Know your time horizon, your comfort with AI-execution risk, and your view on enterprise software spending before making any decision.
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