Salesforce (NYSE:CRM) just had its second-biggest day in the stock market ever. Shares soared nearly 23% on Thursday, reaching about $252 as of this writing, after the software giant reported results for its fiscal second quarter of 2027 (the period ended July 31, 2026) on Wednesday afternoon.
The headline number was hard to miss. Non-GAAP (adjusted) earnings per share came in at $5.90, up 103% year over year. But one line in the release deserves as much attention as that figure. Gains on strategic investments contributed $2.53 of the $5.90. They also contributed $2.43 of the $4.29 the company earned per share under generally accepted accounting principles (GAAP).
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Put another way, more than 40% of the quarter’s reported profit didn’t come from selling software. So what did the software business itself deliver? I’d call it a solid quarter — just not a doubled one.
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The gain mostly traces to Anthropic
The earnings release didn’t name the source of the $2.6 billion in net investment gains recorded during the fiscal second quarter. The quarterly filing that followed on Thursday did.
Salesforce’s strategic investment portfolio (more than 450 companies with a combined carrying value of $11.3 billion) includes a stake in artificial intelligence (AI) model developer Anthropic worth about $5.1 billion. The quarter’s unrealized gains included $2.7 billion related to that one investment, and no other private holding accounts for even a tenth of the portfolio.
The stake’s rise has been fast. Anthropic represented about 22% of the portfolio at the end of January and about 45% by the end of July. There’s a marker behind that jump, too. Anthropic said in May it had raised funding that valued the company at $965 billion.
Notably, the two companies also announced a partnership alongside the results: an effort called Claudeforce, launching with a plug-in that puts Salesforce’s data and workflows inside Anthropic’s Claude chatbot so sellers can review deals and pipelines and update records from there.
The software business grew about 16%
Set the gain aside, and the math is simple. Adjusted earnings per share of $5.90, minus the $2.53 the investments contributed, leaves about $3.37, against $2.91 in the year-ago fiscal quarter. That works out to growth of about 16% per share. In total dollars, it was flatter than that. Diluted shares fell about 15% year over year, and the buyback is doing much of the work.
The rest of fiscal Q2 fits that pace. Revenue rose 11% year over year to $11.3 billion, with subscription and support revenue up 12%. Non-GAAP operating margin came in at 34.1%, and operating cash flow rose 71% to $1.3 billion. Adjusted operating income grew about 10% on low-double-digit revenue growth, a good quarter for a software company this size. It just isn’t a doubling.
The GAAP picture is less flattering. Excluding the gain, GAAP earnings per share of about $1.86 came in below the year-ago quarter’s $1.96. Operating income was flat at $2.3 billion, and interest expense climbed to $473 million from $67 million a year earlier.
The forward-looking numbers
The demand signals held up, too. Current remaining performance obligation (contracted revenue the company expects to recognize over the next 12 months) ended fiscal Q2 at $33.5 billion, up 14% in constant currency.
The AI products kept climbing. Agentforce and Data 360 generated nearly $3.9 billion in combined annual recurring revenue (ARR), up more than 210% year over year and up from $3.4 billion just one quarter earlier. Agentforce ARR passed $1.5 billion, growing more than 240%.
Salesforce also raised its full-year outlook. It now expects fiscal 2027 revenue of $46.1 billion to $46.4 billion, which implies growth of 11% to 12% for the year, with fiscal third-quarter revenue guided to as much as $11.5 billion.
Sure, Thursday’s surge had more behind it than the investment gain. The software business grew adjusted profit at a mid-teens rate once the gain is set aside, the AI products roughly tripled, and the stock went into Wednesday’s report trading about 24% below its 52-week high after a long sell-off.
Even after the jump, shares cost about 16 times the earnings analysts expect for next year — arguably a reasonable price for growth like this with an accelerating AI business attached.
Of course, a valuation mark on a private stake can move in either direction, and it says little about demand for Salesforce’s products. I think the number worth carrying out of this quarter is $3.37, not $5.90. That’s what Salesforce earned per share once the investment gain is set aside. And probably even more important for the Salesforce investment case is the collaboration with Anthropic. A partnership with a leading AI company helps soothe concerns that AI is a threat to Salesforce’s business. Perhaps it’s more of an opportunity than it is a threat.
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Daniel Sparks and his clients do not have positions in any of the stocks mentioned. The Motley Fool has positions in and recommends Salesforce. The Motley Fool has a disclosure policy.
