With high inflation and rising interest rates, the global economic slowdown is weighing on all businesses — even mighty software players such as Salesforce (CRM).
But Salesforce Co-CEO Bret Taylor remains optimistic about demand even as CFOs scrutinize purchases more.
"CFOs have a lot of power right now," Taylor told Yahoo Finance Live at the company's Dreamforce conference on Wednesday (video above). "People are focused not just on top-line growth, like they were for the past few years, but also bottom-line growth. ... It’s obviously a more measured environment, but I think technology is the solution."
Despite the economic pressures, Taylor added that Salesforce's core products like its customer relationship management (CRM) software and workplace messaging program Slack continue to do well as companies look to boost productivity.
That's reflected in the software giant's forecast of double-digit percentage top and bottom line growth. Late in August, Salesforce issued full-year sales guidance for about 17% growth. Non-GAAP earnings are expected to improve by 16% to 17% from a year ago.
At the Dreamforce conference, Salesforce also introduced a host of new products in order to keep existing customers and win new ones, notably, "Genie" and "Slack Canvas." The company also revealed a new $10 billion share repurchase program.
At the same time, Wall Street is carefully monitoring the demand for software and how it could affect industry titans like Salesforce.
"We think that some [demand] weakness should have been expected [in the second quarter] and, net-net, still see a resilient business model that is bending, but not breaking, under the current global macro affecting almost all software companies," JP Morgan analyst Mark Murphy wrote in a note to clients.
Murphy has a buy-equivalent Overweight rating and a $245 price target on Salesforce stock. The price target assumes a 65% upside for Salesforce shares from current levels.
Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
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