Salesforce has shocked wall street with a monster quarter. The stock has been feeling the pressure with a negative narrative hitting the stock price, and even has five activist investors clamoring for changes. Today’s numbers could reverse all the negativity and lead to a higher share price. As CEO Marc Benioff said today, “We have hit the hyper-space button“.

The stock soared 16% in extended trading on Wednesday after the cloud software maker beat estimates on profit and issued a better than expected forecast. Here are the numbers:

• Earnings: $1.68 per share, adjusted, vs. $1.36 per share as expected by analysts.
• Revenue: $8.38 billion vs. $7.99 billion as expected by analysts.

Salesforce’s revenue grew 14% year over year in the fiscal fourth quarter, which ended on Jan. 31. The company reported a loss of $98 million, or 10 cents per share, compared with a loss of $28 million in the year-ago quarter.

CEO Marc Benioff said the company would cut 10% of its workforce, just over 7,000 people, and that its restructuring strategy led to $828 million in costs during the quarter.

The adjusted operating margin, at 29.2%, was the highest in the company’s history. At its investor day in September, Salesforce laid out an operating margin goal of 25% for fiscal 2026.

“Six months ago in September at our Dreamforce Investor Day we shared with you our comprehensive transformation plan, the new day for profitable growth,” Benioff said on the conference call. “But things have changed as we entered our fourth quarter. We recognized that we needed to radically accelerate the transformation plan time frame. We needed to press the hyper-space button and bring the two-year goals forward quickly and exceed them now.”

For the fiscal first quarter, the company called for adjusted earnings in the range of $1.60 to $1.61 per share and revenue of $8.16 billion to $8.18 billion.

Salesforce sees adjusted earnings per share for the full 2024 fiscal year of $7.12 to $7.14 and revenue of $34.5 billion to $34.7 billion. It called for a 27% adjusted operating margin in the 2024 fiscal year, and 30% in the first quarter of 2025.

Salesforce said it’s expanding its share buyback program to $20 billion.

At time of writing, the stock is up over 11% with over 23 million shares traded on the day.

Everything about this chart points to a new uptrend. We have a downtrend line which has been broken, and prices are back over my moving average. Technically, the new uptrend began back on January 9th 2023, when the stock confirmed a reversal pattern (the inverse head and shoulders) breakout. We then got multiple higher low and higher high swings before the stock began consolidating in a flag pattern.

Traders would have loved to see a close above the flag before going long, but the breakout has come long ways away from the flag top. Earnings is the catalyst which has given us the major breakout. The thing is, the breakout has taken us to a resistance target at the $190 zone. Just look to the left of the chart to see why this price level is important. Throughout most of 2022, this zone was the price ceiling for Salesforce.

We still have a lot of time left in the trading day, but right now it looks like we will NOT close above the $190 on the daily chart. It means a pullback is more likely as traders and investors take profits after this incredible rally.

I would be watching the $175 zone for support.

Alternatively, Salesforce could close above the $190 zone and continue this rally up to $220. Technically the uptrend is still in play even if Salesforce pulls back here first. It would just lead to a higher low being developed but the trigger would remain a daily candle close above $190.