Salesforce, Inc. (CRM): A Bull Case Theory

We came across a bullish thesis on Salesforce, Inc. on Darius Dark Investing’s Substack. In this article, we will summarize the bulls’ thesis on CRM. Salesforce, Inc.'s share was trading at $252.86 as of September 2^nd. CRM’s trailing and forward P/E were 39.57 and 22.37 respectively according to Yahoo Finance.

Salesforce, long the undisputed leader in cloud-based CRM, faces a pivotal moment in 2025 as slowing growth in its core Sales and Service Clouds collides with activist pressure for higher margins and disciplined capital allocation. Despite commanding over 20% of the mature CRM market, Salesforce’s high-single-digit growth in legacy products has prompted a bold pivot towards AI, centered on its new Agentforce platform. This initiative aims to transform Salesforce from a passive CRM system into an active “system of execution,” where autonomous AI agents manage sales, service, marketing, and commerce workflows. Early adoption has been strong, with the Data Cloud and AI segment achieving over $1 billion in ARR, reflecting 120%+ year-over-year growth and demonstrating real traction in the market.

To accelerate this transformation, Salesforce has executed a strategic M&A spree, acquiring Informatica for enterprise-grade data management, Regrello for workflow automation, Waii for natural-language access, and Convergence.ai for adaptive AI agents. These acquisitions collectively create a robust, deeply integrated AI platform that addresses enterprise data fragmentation while building a sustainable moat beyond commoditized large language models. Importantly, the company’s strong financial foundation, enhanced by activist-driven cost discipline and margin expansion, has generated over $6 billion in free cash flow, enabling these investments without compromising shareholder returns, which include $3.1 billion returned via buybacks and dividends in Q1 FY2026.

The investment thesis balances high reward against substantial execution risk. If Salesforce successfully integrates its acquisitions and scales Agentforce, it could redefine enterprise AI adoption and reaccelerate growth. Conversely, integration missteps or renewed activist conflicts could pressure margins and stock performance. Nonetheless, with strong cash flow, profitable operations, and early AI traction, Salesforce presents a compelling opportunity for long-term investors willing to navigate near-term volatility while backing a visionary, platform-driven transformation.

Previously we covered a bullish thesis on Salesforce, Inc. (CRM) by Quality Equities in April 2025, which highlighted the company’s resilience amid macro volatility, strong subscription model, and undervaluation relative to free cash flow potential. The stock has depreciated approximately 2% since coverage, reflecting market conditions. The thesis still stands, while Darius Dark Investing shares a similar view but emphasizes the AI-driven Agentforce pivot and strategic M&A.

Salesforce, Inc. is on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 140 hedge fund portfolios held CRM at the end of the first quarter which was 162 in the previous quarter. While we acknowledge the potential of CRM as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.