I Haven’t Stopped Buying Salesforce For This Reason

I keep buying Salesforce (NYSE:CRM | CRM Price Prediction) because the crowd screaming “SaaSpocalypse” is looking at a stock chart while I am looking at a receipts book. The stock is down 34.05% year to date while the S&P 500 is up 8.82%, and every time the gap widens, I add more shares. My cost basis keeps working in my favor, and the business underneath keeps compounding.

The Receipts Behind My Conviction

Start with what actually happened last quarter. Salesforce delivered EPS of $3.88 against a consensus of $3.1271, a 24.08% beat and the fifth consecutive quarter of exceeding estimates. Revenue landed at $11.13 billion, up 13.27% year over year. Net income jumped 36.73%. These are the numbers of a compounder that the market has decided to price like a melting ice cube.

Then there is the AI receipt in plain view. Agentforce and Data 360 combined ARR reached nearly $3.4 billion, up over 200% year over year. Agentforce alone crossed $1.2 billion in ARR, growing 205%. Customers delivered 3.8 billion Agentic Work Units, and more than 50% of new Agentforce bookings came from existing customers. That is real recurring revenue from enterprises paying to have agents do work inside their systems of record. Industry surveys show over 60% of CIOs prefer upgrading incumbent SaaS vendors rather than replacing them with raw models, citing SOC2 compliance and audit trails that startups cannot match. That is the moat.

The capital return finishes the case. Salesforce executed a $25 billion accelerated share repurchase, taking diluted share count from 970 million to 871 million in a year. Total returned in the quarter: $27.5 billion. With a P/E of 19, a free cash flow yield of 10.12%, and a 1.11% dividend that was raised 5.8% this year, I am buying growth at a value multiple.

Why Not the Obvious Alternatives

Readers ask about ServiceNow (NYSE:NOW) and HubSpot (NYSE:HUBS). ServiceNow is down 51% from its 52-week high, and CLSA just initiated with an underperform rating and a $72 price target implying 31% downside. HubSpot got cut by Wells Fargo from Overweight to Equal Weight with the target sliced from $300 to $225 on AI transition uncertainty. Salesforce already carries the average Wall Street target of $254.42 against a stock trading at $173.79. Same fear, better fundamentals, cheaper entry.

The Risk I Own

Noncurrent debt jumped from $10.4 billion to $39.3 billion to fund the buyback, and Informatica integration is a real execution project. Interest coverage of 27.5x and net debt to EBITDA of 0.78 tell me the balance sheet absorbs it. I am fine with management leaning into a cheap stock.

Marc Benioff called this “an outstanding quarter for Salesforce, record revenue, record deals, and cash flow” and set a $63 billion FY30 revenue target. I will keep buying while the market sells me a compounder at a value multiple.

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