Riding the wave of frenzied interest in artificial intelligence and its potential to provide the next catalyst for growth, Salesforce (CRM:NYSE) stock has been hot this year, up more than 50% to date.

But maybe Wall Street is getting a little too upbeat, at least in the short-term, with some analysts urging investors to cool their heels. Adopting and integrating Generative AI into its various products will be no easy task, and Morgan Stanley thinks ‘near-term catalysts’ for Salesforce’s stock are ‘in the rear-view mirror’.

The market seems to have already come to this conclusion, judging by the 10%-plus decline for the shares since mid-July. More pressing matters include core demand for Salesforce subscriptions at a time when many corporates are thinking twice before spending.

Better news comes from pricing, with the company last month announcing average 9% increases across the suite, which will tell us something about how critical Salesforce is to customers. This quarter will come too soon for any meaningful evidence, but analysts seem positive about the company’s second quarter to 31 July, with consensus implying 11% and 90% revenue and earnings per share growth year-on-year, a welcome sign of Salesforce’s new laser focus on profitable growth, not expansion at any price.

Salesforce will report its second quarter 2024 earnings on 30 August.

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QUARTERLY RESULTS

August 25: Meituan, Marvell, Dell Tech

August 28: Fortescue Metals

August 29: Bank of Montreal, Bank of Nova Scotia, HP, Best Buy, Shoe Carnival

August 30: Salesforce, National Bank of Canada

August 31: Broadcom, Pernod Ricard, Campbell Soup, Samsara, Polestar Automotive

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