In a recent appearance on Schwab Network's the Trading 360 with Nicole Petallides, Chris Wang provided expert insights and analysis on upcoming earnings report from Salesforce (CRM).

We don’t see many meaningful positive catalysts heading into this earnings report where the street is looking for just single-digit revenue growth for the first time in the company’s history. While expectations have a low bar to beat, reseller checks are coming in poorly with just 20% of resellers reporting some level of outperformance to their plans which is a level that hasn’t been seen since the pandemic impacted quarters. Resellers have also pointed to higher levels of discounting and smaller deal sizes overall. This doesn’t paint a rosy backdrop for the Q2 results. Expectations aren’t overly optimistic as consensus is calling for just 1.5% subscription revenue growth vs the historic average of 7%; but there is little reason to expect a big surprise beat tonight. Because of this, investors will have to wait for next month’s Dreamforce to see what AI innovations the company is bringing to its product suite for reasons to drive the stock higher.

If GDP growth continues to slow, Salesforce can be viewed as a hiding spot, as a low volatility, large cap name. But software names in general have been facing the same macro issues that have plagued the rest of software this cycle. Last quarter, cRPO grew at 10% which was below guidance of 12%. All eyes will be on this number as it is a leading indicator of future growth.

We like Adobe which is the dominant software solution for creators. While there is some investor concern over new AI competitors, we don’t see AI as being a headwind but a big opportunity for the company. Over the years, Adobe has been able to integrate and cross-sell with its creative suite. This will also apply to hungry creative AI video startups who will partner with Adobe’s best in class video tools for editing later this year. Adobe is also the 800 pound gorilla and can outspend the competitors by many multiples in the AI arms race. This will be beneficial to long-term growth and the company already has stellar 47% operating margins. While it trades at a premium multiple, it should be able to expand its multiple further as it accelerates its growth prospects.