Salesforce (CRM) Was Meant to Be an AI Casualty. The Results Say Otherwise

Salesforce, Inc. (CRM) was widely expected to be among the main victims of the disruption caused by artificial intelligence (AI) in enterprise software. The concern is understandable. The rapid emergence of AI-native alternatives could reduce switching costs and weaken the traditional recurring revenue model used by software-as-a-service (SaaS) companies. However, when I look at Salesforce's most recent results and forward guidance, I do not see a company in structural decline.Claim 55% Off TipRanksUnlock hedge fund-level data and powerful investing tools for smarter, sharper decisions Discover top-performing stock ideas and upgrade to a portfolio of market leaders with Smart Investor Picks On the contrary, the customer-relationship-management giant continues to grow, and its AI products are gaining traction quickly. At the same time, the current valuation already appears to reflect a very high degree of skepticism, especially given the potential for earnings growth to reaccelerate over the next several fiscal years. That is why I continue to view the bullish thesis on Salesforce as valid today. If fears surrounding AI prove to be overblown, I believe the stock is meaningfully undervalued. In this article, I present the main arguments supporting that view. Punished More by AI Fears than by Business Fundamentals It seems quite clear to me that the market has placed Salesforce in the same "basket" as enterprise SaaS companies perceived to be at immediate risk of disruption from AI. The bearish thesis that has pressured Salesforce shares is that AI coding, agentic AI, and more AI-native tools could reduce switching costs, which have long been one of the company's biggest competitive advantages. Over time, that could lead to lower seat counts and put pressure on Salesforce's highly predictable subscription revenue model.