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While the AI trade continues to dominate the market, one tech stock is being left out: Salesforce (CRM). Salesforce is down 31% year-to-date. With its Q3'25 earnings report coming up next Wednesday afternoon, this is an interesting moment for the stock.
 

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The problem with Salesforce is that revenue growth has been decelerating the last few years. After growing the top line greater than 20% for many years, Salesforce’s revenue growth is expected to be only 8% this year. So the question arises: Is it still a growth stock? The answer to that question has implications for the multiple assigned to its earnings.

On page 62 of their Investor Presentation from Oct. 15, 2025, Salesforce said that revenue growth would reaccelerate to 10% CAGR over the next four years, culminating in $60 billion in revenue in FY30 from ~$41 billion this year (FY26). If they can deliver on that, I think the recent price represents a nice entry. The stock trades at 20x FY26 EPS guidance of $11.35.

While revenue growth has decelerated in recent years, Salesforce has become a much more efficient company, as evidenced by its expanding Operating Margin. Operating Margin is expected to come in at 34.1% this year – almost double the 17.7% it delivered five years ago (FY21). You can see this on page 64 of the Investor Presentation.

Salesforce bought back almost $5 billion in stock in the first six months of FY26, and they have an authorization to buy back up to $50 billion more. In other words, if the stock continues to dip, the company will be an active buyer of its own stock.

My bias is to give high quality companies the benefit of the doubt – and I do believe Salesforce is a high quality company that will therefore likely do fine over the long-term. As a result I’m quite interested in what they report on Wednesday afternoon, and I will be thinking through my strategy heading into it.

One idea is to sell Salesforce $220 Dec. 5 Puts for ~$4.60. You collect ~$460 in premium per contract, but you would be obligated to buy the stock for $220 should it trade below that level. Note that this is still a profitable trade as long as Salesforce doesn’t trade below $215.40. Alternatively, I may take a small position heading into earnings with the idea of adding more should it sell off after reporting.
 

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