Salesforce, Inc. CRM has been on a remarkable rally, rising 32.8% over the past six months despite broader market volatility. This impressive gain outpaces the Zacks Computer – Software industry’s 9% rise and the S&P 500’s 15.3% increase. Even tech giants like Microsoft Corporation MSFT, Intuit Inc. INTU and Adobe Inc. ADBE haven’t matched Salesforce’s recent performance, cementing its position as a leader in enterprise software.

One-Month Price Return Performance

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The big question arises for investors: Can Salesforce sustain this momentum? The answer is a resounding yes. Here’s why CRM remains a compelling buy even after its recent surge.

Salesforce’s Market Dominance Remains Unchallenged

Salesforce is the undisputed leader in the customer relationship management (“CRM”) industry, consistently outpacing rivals like Microsoft, Oracle and SAP. Gartner’s annual rankings reaffirm its top position year after year. Its ability to maintain this dominance stems from its expansive product suite, seamless integrations and innovative approach to enterprise solutions.

Strategic acquisitions have played a crucial role in strengthening its market position. The $27.7 billion acquisition of Slack in 2021 transformed its collaboration capabilities, making Salesforce an all-encompassing enterprise software provider. More recently, the $1.9 billion acquisition of Own Company in 2024 bolstered its data protection and AI capabilities, a move that aligns with growing enterprise priorities around security and automation.

Salesforce’s AI initiatives further cement its leadership. Since introducing Einstein GPT in March 2023, the company has expanded its AI-driven functionalities across its entire ecosystem. This technology enhances automation, streamlines workflows and improves customer interactions, giving Salesforce a significant advantage as AI adoption accelerates across industries.

Booming IT Spending Provides Strong Tailwinds to Salesforce

Salesforce is positioned to benefit from the continued rise in worldwide IT spending. Gartner projects global IT spending to reach $5.61 trillion in 2025, a 9.8% year-over-year increase. Enterprise software spending is expected to grow even faster, rising 14.2% year over year. As digital transformation remains a top priority for businesses, Salesforce is well-positioned to capture a substantial share of these increasing budgets.

The company’s financial outlook supports this growth narrative. The Zacks Consensus Estimate projects 9% revenue growth and 11.3% earnings per share (EPS) growth for fiscal 2026.

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Additionally, its long-term earnings growth rate is expected to reach 14.8%, outpacing the industry average of 13.1%. Salesforce has also demonstrated a strong track record of exceeding expectations, surpassing earnings estimates in three of the last four quarters, with an average earnings surprise of 3%.

Find the latest earnings estimates and surprises on Zacks Earnings Calendar.

Salesforce Valuation: A Premium Worth Paying

Some investors may be concerned about Salesforce’s valuation, as it trades at a forward price-to-earnings (P/E) ratio of 32.9, slightly above the industry average of 31.11. However, this premium reflects the company’s unmatched position in AI-powered CRM solutions and ability to sustain long-term growth.

Salesforce’s dominance in enterprise software ensures strong customer retention and consistent revenue growth. Unlike smaller competitors that struggle with pricing pressure, Salesforce benefits from its ecosystem of enterprise clients who rely on its platform for mission-critical operations. Additionally, its aggressive expansion into AI-driven automation and cloud-based CRM solutions positions it for continued success in the evolving software landscape.

Forward 12-Month P/E Ratio

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Conclusion: Buy Salesforce Stock Now

Salesforce’s 33% rally over the past six months is backed by strong fundamentals, not just market momentum. The company’s leadership in CRM, aggressive AI expansion and increasing enterprise IT spending trends create a solid foundation for sustained growth. Its ability to maintain double-digit earnings growth and consistently outperform analyst expectations further reinforces its investment appeal.

Even with its recent gains, Salesforce remains a compelling buy. The stock still has room to run as AI adoption accelerates, IT spending increases and enterprises deepen their reliance on CRM solutions. For investors seeking a high-quality growth stock with staying power, Salesforce is an opportunity worth seizing.

Salesforce carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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