Salesforce earnings to higher AI investment drive as cloud spending cools

Salesforce  (CRM) - Get Free Report shares edged higher in pre-market trading ahead of the cloud-focused software group's second quarter earnings slated for after the closing bell.

Analysts expect Salesforce to post a bottom line of $1.90 per share for the three months ending in July, up 60% from last year, with revenues rising 10.5% to around $8.53 billion. 

The figures won't reflect price increases brought by Salesforce earlier this summer -- the first in seven years-- that took effect on August 1 and will see costs for its cloud and marketing tools rise by an average of 9%. 

The move followed the slowest rate of topline growth in more than 10 years last quarter -- when revenues were up 11% to $8.25 billion -- thanks in part to slowing client demand for cloud-based software offerings, 

The added revenue generation is also likely to fuel some of Salesforce's AI investments, which the group has devoted $20 billion in research and development over the past seven years.

"(Salesforce) is dedicated to leveraging artificial intelligence to help businesses improve customer experiences, increase efficiency, and make smarter decisions," said Crispidea analyst Ankit Sanwaria, who carries an 'overweight' rating with a $240 price target on the stock. "AI is the future of Salesforce and it is committed to investing in this technology."

Salesforce shares were marked 0.04% higher in pre-market trading to indicate a Wednesday opening bell price of $212.04 each.

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