There has been a silent identity crisis for CRM stock. Salesforce was the dominant force in cloud software for many years, transforming customer relationship management into a lucrative subscription business. Its headquarters, the shining Salesforce Tower that rises over the skyline of San Francisco, used to seem like a testament to its unrelenting expansion. The stock is currently trading at about $194, far below its peak of over $300 last year, and the atmosphere is more composed.
Salesforce, Inc., the company that created the ticker, recently reported a successful quarter. Revenue increased 12% year over year to $11.2 billion in the fourth quarter. Adjusted earnings easily exceeded forecasts. The year’s free cash flow exceeded $14 billion. It was a good performance on paper.
Nevertheless, CRM stock fell. Investors seem to be posing a more profound query: Is this the best option available?
Salesforce announced one of the biggest share repurchase programs in tech history, worth $50 billion. The management presented it as confidence, implying that the stock is cheap. However, buybacks can convey conflicting messages. Yes, they give back to shareholders, but they also point to fewer chances for rapid expansion in the future. The market might have heard something a little different from what management had intended.
| Company Name | Salesforce, Inc. |
|---|---|
| Stock Ticker | CRM (NYSE) |
| Founded | 1999 |
| Headquarters | San Francisco, California, USA |
| CEO | Marc Benioff |
| Employees | 76,453 (2025) |
| Market Cap | ~$182.5 Billion |
| 52-Week Range | $174.57 – $303.07 |
| Latest Price | $194.79 (Feb 27 Close) |
| P/E Ratio | ~25 |
| Dividend Yield | ~0.90% |
| Investor Relations | https://investor.salesforce.com |
| Company Website | https://www.salesforce.com |
The discourse surrounding enterprise software has changed in the last few months. Artificial intelligence has evolved from a feature to a battlefield. Salesforce has launched Agentforce, a collection of AI agents intended to help business users and automate tasks. According to reports, Agentforce’s yearly recurring revenue increased by almost 170% to $800 million. It sounds like a dramatic growth. But it’s only a piece of the puzzle in a business that makes over $41 billion a year.
It’s difficult to overlook how the tech industry has developed as you pass office buildings with half-lit floors and mixed work schedules in downtown San Francisco. Cost control and shareholder returns have replaced the 2010s’ rapid hiring and venture capital-driven growth. Salesforce, which was formerly recognized for its aggressive acquisitions and quick growth, is now more forthcoming about capital efficiency and margins.
The price of CRM stock is about 25 times its earnings. For a software business with high margins and robust cash generation, that isn’t out of the ordinary. However, it doesn’t shout “deal” either. Next year, analysts anticipate revenue growth of roughly 10% to 11%, which is respectable but not particularly hypergrowth.
It appears that investors think AI will speed up that figure. The guidance hasn’t changed dramatically thus far.
Salesforce’s longtime CEO, Marc Benioff, has always had faith in the company. He discusses how autonomous agents and digital labor are changing enterprise workflows during earnings calls. He depicts a future in which businesses depend on AI-powered systems integrated into marketing, sales, and customer support operations. The vision is ambitious. However, it’s still unclear if Salesforce will control that change in the same manner that it did CRM software.
There are rivals circling. AI is deeply ingrained in Microsoft’s enterprise stack. Alphabet is using Google Cloud to promote generative AI. AI-native startups are starting to appear with lighter, more agile platforms. Salesforce continues to have a significant advantage thanks to its massive installed base and decades’ worth of customer data. However, incumbency can serve as a weight and a shield.
The issue of stock-based compensation is another. In the past, Salesforce has diluted shareholders by offering generous equity packages to recruit talent. That dilution is partially offset by buybacks. They don’t completely eradicate it. One wonders how much of the billions flowing into repurchases is maintenance and how much is true capital return.
However, it would be unjust to completely reject the company. The average gross margin is 75%. Cash flow from operations is increasing. Over $70 billion is spent on remaining performance obligations, which are essentially contracted future revenue. Even if growth slows, the company is stabilized by the visibility that that backlog offers.
The differences between Salesforce today and Salesforce ten years ago are difficult to ignore. Growth above 20% seemed normal at the time. Consistent low-double-digit growth is now regarded as healthy. In the stock market, the shift from disruptor to incumbent is rarely seamless.
The stock of CRM has dropped by roughly 24% so far this year. A mature, cash-generating software leader trading below its historical multiple is appealing, according to some investors who see opportunity. Others are concerned that AI may reduce industry pricing power and quickly make software a commodity.
It seems like Salesforce is at a turning point as we watch this play out. Not an emergency. No collapse. A recalibration, however.
It is no longer the new cloud rebel company. It is a well-known behemoth that defends market share, improves margins, and repurchases stock. Being there isn’t a bad thing. However, it’s not the same.
