Salesforce Secures Major Defense Contract Amid Stock Weakness

Salesforce shares are trading near their lowest point in a year, presenting investors with a critical question: can a newly announced multi-billion dollar contract with the U.S. Army provide enough support to stabilize the recent downward trend?

The primary catalyst for renewed investor focus is a confirmed, substantial defense agreement. The company has been awarded a ten-year, indefinite delivery/indefinite quantity (IDIQ) contract valued at $5.6 billion. This project will be executed through Salesforce’s subsidiary, Missionforce National Security (Computable Insights LLC), with the objective of modernizing Army structures and operational processes using advanced data and cloud technologies. This deal underscores continued confidence from major public sector clients in Salesforce's infrastructure, even within a challenging broader market environment.

Financial Performance Contrasts with Share Price Action

Despite the positive news of the large contract, the stock remains under significant pressure. Closing yesterday at $228.58, the share price sits just above its 52-week low of approximately $219. Over a twelve-month period, this represents a decline of 34-35%, a performance notably weaker than the broader technology sector.

This share price weakness is occurring against a backdrop of solid quarterly financial results. For the third quarter of fiscal year 2026, Salesforce exceeded market expectations:

• Non-GAAP Earnings Per Share: $3.25 (surpassing forecasts of $2.86)
• Revenue: $10.26 billion, representing a 9% year-over-year increase

The company's current market capitalization stands at around $213 billion. Analyst sentiment appears more favorable than the current trading level suggests, with a consensus rating of "Moderate Buy" and an average price target of $324.51.

Should investors sell immediately? Or is it worth buying Salesforce?

Institutional Activity and Corporate Integration

Recent filings reveal a mixed picture of institutional investor moves during Q3 2025:

• Notable Purchases:

  • EPG Wealth Management LLC increased its holdings by 64.6%, adding 5,020 shares.
  • Federated Hermes Inc. raised its stake by a significant 85.3%.

• Notable Sale:

  • The Bank of New York Mellon Corp reduced its position by 2.3%, selling 136,470 shares. It continues to hold a substantial stake valued at over $1.3 billion.

On the corporate front, Salesforce is actively integrating recent acquisitions. As part of its Inducement Equity Incentive Plan, the company issued equity packages yesterday to employees who joined from acquired firms Apromore, Spindle AI, and Informatica. This move is designed to secure the long-term commitment of key personnel from these strategic purchases.

Key Data Summary

• New Contract: $5.6 billion, 10-year term, awarded by the U.S. Army
• Recent Closing Price: $228.58 (yesterday)
• 52-Week Range: $218.96 to $367.09
• Q3 FY 2026 Results: EPS of $3.25 (beat), Revenue of $10.26 billion
• Market Capitalization: Approximately $213 billion
• Analyst Consensus: "Moderate Buy," average price target $324.51

Forward-Looking Considerations

The coming months will likely hinge on two key factors. First, the market will watch how swiftly and profitably the U.S. Army contract translates into measurable revenue and earnings. Second, investors will assess whether Salesforce can accelerate its revenue growth rate beyond the recent 9% level. A concurrent challenge remains the stock's ability to find a stable footing while trading near its annual low and lagging the technology sector, despite consistently outperforming earnings expectations.