CrowdStrike and Salesforce Earnings Due Wednesday as Rally Faces Sustainability Test
CrowdStrike and Salesforce are due to report quarterly results after Wednesday's close, testing whether recent share rebounds can be sustained. CrowdStrike has more than doubled from its February low and is up over 55% year to date, while Salesforce, despite recovering 40% from its June low, remains down 22% on the year and more than 30% off its late-December record high. Executives at both firms have cited artificial intelligence as a demand driver for security and customer software. Investors will scrutinise the earnings calls for signs of ongoing momentum.
Two representative companies in the enterprise software sector will post their latest quarterly results after Wednesday's market close. The performance of cybersecurity firm CrowdStrike and customer relationship management software maker Salesforce will test the sustainability of the recent rebound in their shares. Earlier, amid concern that artificial intelligence is disrupting traditional software, the cybersecurity segment recovered first, while traditional software-as-a-service (SaaS) stocks only showed signs of revival during the summer. The market has gradually accepted the view that the AI boom will strengthen, rather than replace, demand for cybersecurity.
CrowdStrike's share price hit a 52-week low of about $86 on February 23, and has since doubled from that low, before rising to an all-time high earlier this month and then pulling back. The stock is up more than 55% year to date. Chief Executive Officer George Kurtz said during the last earnings season that AI is driving growth in demand for security solutions, as customers need to ensure security before deploying AI.
Salesforce's shares hit a 52-week low of $146 on June 22, and then rose 40% over nine weeks. Even so, the stock remains down 22% year to date and more than 30% below its record high set at the end of December. The company last reported results on May 27, after which shares climbed to about $209 before retreating to the June low. This week the stock again touched that level. Salesforce's annual conference, Dreamforce, is scheduled for September 15 to 17.
Another major cybersecurity company, Palo Alto Networks, saw its CEO Nikesh Arora discuss industry cycles in the last earnings season. He said the cybersecurity industry has inherent processes and cycles for procurement, execution and deployment, and that demand growth will not immediately translate into a surge in performance. The company's shares have performed well since its results on June 2, with the next quarterly report due next week. CrowdStrike's annual user conference, Fal. Con, is set for August 31 to September 3 in Las Vegas.
Why this event matters
The event has a measured impact on 1 industry. The strongest current signal is mixed for Enterprise Software, with intensity 60/100 and 70% confidence over a short term horizon.
Impact figures are analytical estimates that combine direction, intensity, confidence and event importance. They are not investment advice.