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

We came across a bullish thesis on Salesforce, Inc. on HatedMoats’s Substack. In this article, we will summarize the bulls’ thesis on CRM. Salesforce, Inc.'s share was trading at $230.54 as of November 28th. CRM’s trailing and forward P/E were 33.51 and 18.18, respectively according to Yahoo Finance.

Salesforce, Inc. provides customer relationship management (CRM) technology that connects companies and customers together worldwide. CRM represents a wide-moat enterprise software leader whose platform is deeply embedded in customer workflows, creating significant switching costs and reinforcing its dominance through a vast partner ecosystem and AppExchange network. Years of efficiency improvements have transformed it into a cash-generation engine, with operating margins nearing 35% and over $12 billion in annual free cash flow, enabling both a meaningful dividend and an aggressive $50 billion buyback program exceeding 20% of market cap.

The strategic pivot from acquisition-driven expansion to disciplined capital returns reflects a more mature, shareholder-aligned phase. While core revenue growth has slowed to the high single digits amid market saturation and macro-driven IT budget caution, Salesforce’s long-term opportunity lies in AI and data unification: products like Data Cloud, Agentforce, and the Informatica acquisition aim to catalyze a new upgrade cycle and deepen account penetration. Competitive pressure—particularly from Microsoft’s bundled Dynamics offering—remains a key risk, alongside integration challenges and the possibility that AI investments yield efficiency gains rather than revenue acceleration.

Market sentiment has cooled in 2025 as investors reassess the company’s growth ceiling, but valuation has become reasonable: an FCF yield near 5% and forward P/E around 20x suggest the stock is fairly valued at ~$250. Hated Moats assigns a 55% probability of Salesforce modestly outperforming the S&P 500 over five years, viewing it as a steady compounder rather than a high-beta AI winner. The verdict: HOLD, with a more attractive entry point in the $215–$230 range and strong value below $215 if growth or AI adoption re-accelerates.

Previously we covered a bullish thesis on Salesforce, Inc. by Quality Equities in April 2025, which highlighted the company’s tariff-insulated cloud model and undervalued long-term free cash flow trajectory. The company’s stock price has depreciated approximately by 6.76% since our coverage. This is because macro uncertainty pressured software multiples. The thesis still stands as Salesforce’s subscription resilience remains intact. HatedMoats shares a similar view but emphasizes capital returns and maturation.

Salesforce, Inc. is on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 121 hedge fund portfolios held CRM at the end of the second quarter which was 140 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.