Salesforce's (CRM) Inventors' Confidence Shaken on Lower Growth Guidance

Investment management company Vulcan Value Partners recently released its third-quarter 2025 investor letter. A copy of the letter can be downloaded here. The third quarter was a good one for the portfolios. The absolute performance was positive across all the strategies, while the relative performance lagged. In the quarter, the Large Cap Composite returned 4.6% net of fees and expenses, the Small Cap Composite returned 4.1% net, the Focus Composite returned 3.7% net, the Focus Plus composite returned 3.7% and the All-Cap Composite returned 5.5% net. For more information on the fund’s best picks in 2025, please check its top five holdings.

In its third-quarter 2025 investor letter, Vulcan Value Partners highlighted stocks such as Salesforce, Inc. (NYSE:CRM). Salesforce, Inc. (NYSE:CRM) offers Customer Relationship Management (CRM) technology that brings companies and customers together. The one-month return of Salesforce, Inc. (NYSE:CRM) was -3.15%, and its shares lost 18.73% of their value over the last 52 weeks. On October 15, 2025, Salesforce, Inc. (NYSE:CRM) stock closed at $236.58 per share, with a market capitalization of $225.224 billion.

Vulcan Value Partners stated the following regarding Salesforce, Inc. (NYSE:CRM) in its third quarter 2025 investor letter:

"Salesforce, Inc. (NYSE:CRM) is the world’s leading SaaS vendor for customer relationship management (CRM) and salesforce automation (SFA) software, including AI agents. Salesforce offers many other products including software for marketing automation, customer service automation, analytics, application integration, and enterprise collaboration among others. Growth guidance for the upcoming quarter was slightly lower than anticipated leading some investors to question whether Salesforce’s growth was slowing and AI investments were not bearing fruit. These questions have been amplified by a bearish industry narrative that AI will take market share from enterprise software companies like Salesforce. We believe the company is poised for sustained growth and will actually benefit from AI. Salesforce’s software is deeply embedded in the enterprise. The company is expanding its product suite with multiple cloud offerings, proprietary data, and an emphasis on being an AI innovation leader. In addition, its customers would rather focus on running their businesses instead of designing, testing, maintaining, and securing internal AI products in an ever-evolving landscape. Salesforce is deeply entrenched within its customer base, has high retention, high recurring revenue, and is a very scalable business with high margin potential. Salesforce is dominant across its offerings and is constantly innovating with new products like Agentforce to deepen customer relationships and grow the business.

Salesforce, Inc. (NYSE:CRM) is in the 16th position on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 121 hedge fund portfolios held Salesforce, Inc. (NYSE:CRM) at the end of the second quarter, compared to 140 in the previous quarter. In the second quarter of 2026, Salesforce, Inc. (NYSE:CRM) reported revenue of $10.25 billion, reflecting an increase of 10% year over year and 9% in constant currency. While we acknowledge the potential of Salesforce, Inc. (NYSE: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.

In another article, we covered Salesforce, Inc. (NYSE:CRM) and shared the list of stocks Jim Cramer discussed. Oakmark Equity and Income Fund initiated a position in Salesforce, Inc. (NYSE:CRM) during Q3 2025 believing it as a robust business transforming into a more profitable share holder focused company. In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.

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