Jim Cramer Shares Important Metric For Salesforce, Inc. (CRM)'s Hypothesis

We recently published 10 Stocks Jim Cramer Discussed As He Remained Optimistic About American Ingenuity. Salesforce, Inc. (NYSE:CRM) is one of the stocks Jim Cramer recently discussed.

Cramer has frequently discussed Salesforce, Inc. (NYSE:CRM) this week, and most of his comments have been wistful. The firm’s shares have lost 26.6% year-to-date, and Cramer has previously commented that some of Salesforce, Inc. (NYSE:CRM)’s woes are due to it being perceived as being disrupted by AI. This time, he discussed the firm in the context of Adobe’s earnings and commented on the business and consumption models. For reference, software-as-a-service stocks, such as Salesforce, Inc. (NYSE:CRM), have traditionally operated on a seat-based model, which sees them sell a set number of ‘seats’ or ‘licenses’ to customers. On the other hand, a consumption model refers to payment-by-usage. Here is what Cramer said about Salesforce, Inc. (NYSE:CRM):

“David, you know what this is like, you know it’s like Salesforce. Those are the two that keep coming up as being able to be cannibalized by themselves because of what you can do with AI.

[CRM]”Seat shrinkage is the story. That’s the operative term you’re going to be hearing, going forward. The number of seats are shrinking. Now the new plans that Salesforce has, as a consumption model, in other words, it’s not about losing seats. But, the old Salesforce, seats could go down. Because you could develop product, you can develop with AI a lot of tools that make it so that you can do this stuff yourself. I think these are two fantastic companies. But you know what, that just doesn’t matter, David.”

While we acknowledge the potential of CRM as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.

READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now.

Disclosure: None. This article is originally published at Insider Monkey.