Salesforce stood on stage at Dreamforce and announced it will make over $63 billion in revenue by fiscal 2030. That's six years from now. The company beat analyst estimates for a future that hasn't happened yet.
Analysts had lower numbers. Salesforce said no, higher numbers. Everyone nodded. The stock moved. Retail traders checked their portfolios and felt something they mistook for informed decision-making.
Here's what happened. Salesforce executives opened PowerPoint. They typed numbers into cells. They chose numbers bigger than what analysts expected but not so big that anyone would laugh. They presented these numbers as targets. The word target does heavy lifting here. It means we made this up but with confidence.
The estimates Salesforce beat were also made up. Analysts guessed what Salesforce would guess. Salesforce guessed higher. This counts as beating estimates. The financial media wrote headlines. You're reading one.
Fiscal 2030 arrives in six years. Between now and then, Salesforce will host five more Dreamforce conferences. At each one, they'll issue new targets. The targets will change. No one will remember the old targets. Analysts will publish new estimates. Salesforce will beat those too.
Somewhere right now, a retail trader is calculating position size based on a revenue target for a fiscal year that ends after the next World Cup. He's using a compound annual growth rate formula. He's feeling smart. He's confusing a company's marketing event with his own research.
The conference had keynote speakers and product demos and probably some kind of branded tote bag situation. What it didn't have was a working time machine, which is the only thing that would make a 2030 revenue target relevant to a decision you're making today.
Salesforce executives return to their offices. They high-five. They beat estimates they knew about before analysts published them because the estimates were about their own guidance. That's not insider trading. That's just Wednesday.
Photo by Kafui Yevu on Unsplash
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