Salesforce: Boring on the Surface, Dangerous to Ignore
View original at finance.yahoo.comSalesforce: Boring on the Surface, Dangerous to Ignore This article first appeared on GuruFocus. Looking at the current state of the tech market, I see a fascinating disconnect between reality and sentiment…
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The narrative has been dominated by fears that artificial intelligence will disrupt Salesforce's business model
80% confidenceRating Salesforce as 'Strong Buy' with expected fair value of roughly $314 per share
80% confidenceIf the stock simply re-rated to its average historical P/E multiple of around 22x, the price would jump to over $280
80% confidenceSalesforce is successfully selling the AI agents themselves, opposite to fears that AI will replace human workers and shrink revenue
80% confidenceManagement noted that for the first time in years, the deal size for new business is growing faster than the deal size for existing business renewals
80% confidenceManagement signaled they are going to accelerate share buybacks in the second half of the fiscal year
80% confidenceMore than half of the new bookings for AI products (Agentforce and Data Cloud) are coming from existing customers
80% confidenceThe market is treating Salesforce like a boring legacy company that has seen its best days
80% confidence