Core Viewpoint - The discussion highlights a shift in sentiment towards legacy software stocks, with a growing belief that companies like Salesforce, Workday, and ServiceNow may be in a precarious position due to advancements in AI technology [5][6]. Software Industry - There is a notable concern regarding the future of legacy software stocks, with a belief that their business models are under threat from AI advancements [6]. - The recent repricing of software stocks is seen as a reflection of declining hiring needs and increased productivity per employee, indicating a fundamental change in the software landscape [3][4]. - Companies that have historically relied on consistent pricing and expansion, such as Salesforce, may face challenges as their terminal values are reassessed in light of AI developments [4]. AI Sector - The future investment focus is expected to shift towards AI-driven companies that are built from the ground up, rather than legacy software firms [5]. - The productivity gains from AI tools are anticipated to reduce the need for traditional software solutions and the associated workforce [8]. Cryptocurrency Market - Bitcoin has shown signs of stabilization, but there are mixed opinions on its future trajectory, with some analysts predicting potential declines [9][10]. - Companies like Robinhood are diversifying beyond crypto, which may help mitigate weaknesses in their crypto-related business [11]. - The volatility in the cryptocurrency market has led to a demand for more sophisticated treasury solutions that can manage risks associated with Bitcoin and Ethereum [14].

Salesforce Stock and 10 More That Have Cratered and Look Like Buys - Barron'sSkip to Main ContentThis copy is for your personal, non-commercial use only. Distribution and use of this material are governed by our Subscriber Agreement and by copyright law. For non-personal use or to order multiple copies, please contact Dow Jones Reprints at 1-800-843-0008 or visit www.djreprints.com.# Salesforce and 10 More Stocks That Have Cratered and Look Like BuysBy [Jacob Sonenshine]ShareResize---ReprintsWhile Salesforc ...

Core Insights - Salesforce, Inc. (CRM) shares have decreased by 16.8% over the past six months, underperforming the Zacks Computer and Technology sector which gained 10.8% [1] - The decline raises questions about whether this is a buying opportunity or a signal to move on from Salesforce stock, despite strong fundamentals still supporting investment in CRM [1] Performance Overview - Salesforce's revenue growth has slowed from double digits to single digits, with a year-over-year increase of only 8.7% in the first nine months of fiscal 2026 [3][4] - The Zacks Consensus Estimate projects revenue growth of 9.5% for fiscal 2026 and 10.9% for fiscal 2027, indicating no significant improvement in the near term [4] Profit Forecasts - Earnings per share (EPS) is expected to grow at a CAGR of 15% over the next five years, a significant drop from the previous five years' CAGR of 27.8% [5] - EPS forecasts for fiscal 2026 and 2027 indicate year-over-year improvements of 15.3% and 10.5%, respectively [5] Market Dynamics - The slowdown in growth reflects cautious enterprise spending amid economic uncertainty and geopolitical pressures, leading businesses to prefer smaller, lower-risk IT investments [4][9] - Salesforce is focusing on enhancing its enterprise software portfolio and integrating AI across its product lines to remain competitive [9] AI Integration and Revenue Growth - Salesforce's AI initiatives, particularly Agentforce and Data Cloud, generated $1.4 billion in recurring revenues in Q3 of fiscal 2026, marking a 114% year-over-year increase [12] - Agentforce alone contributed $540 million in recurring revenues, up 330% year over year, with over 50% of deals coming from existing clients [12] IT Spending Trends - Gartner estimates worldwide IT spending will increase by 9.8% year over year to $6.08 trillion in 2026, with software expected to grow by 15.2% to $1.43 trillion [13] - Despite potential short-term spending slowdowns, digital transformation remains a priority for businesses, ensuring steady demand for Salesforce's solutions [13] Valuation Analysis - Salesforce's stock currently trades at a forward P/E ratio of 14.89, significantly below the sector average of 25.91, indicating that much of the pessimism is already priced in [14] - Compared to competitors like SAP, Microsoft, and Oracle, Salesforce stock is cheaper on a P/E basis [17] Competitive Position - Salesforce has outperformed major competitors in the enterprise software space over the past six months, with Microsoft, SAP, and Oracle stocks declining by 23.1%, 29.2%, and 43.5%, respectively [18] Investment Recommendation - Despite slowing growth, Salesforce's leadership in customer relationship management, focus on AI, strategic acquisitions, and reasonable valuations provide compelling reasons to invest in the stock [19]

Salesforce, Inc. (NYSE:CRM) is one of the software stocks that Jim Cramer named as potential undervalued buys. Cramer noted that the stock is among those that look “enticing” and stated: Well, those are my top five that passed the strict screen we ran to identify undervalued software stocks. But if you’re willing to step a little outside these strict parameters, I’ve got five more that are starting to look enticing. Well, first, there is Salesforce, which we own for the Charitable Trust. Photo by jason ...

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Core Insights - Salesforce Inc. has recently implemented workforce cuts affecting fewer than 1,000 employees across various teams, including marketing, product, and data, although the company has not publicly confirmed these layoffs [1] - The company has appointed six new or promoted executives to lead different business units, replacing five high-profile leaders who have departed since December [2] - The layoffs are part of a broader trend in the tech industry, where many companies are reducing staff while increasing their reliance on artificial intelligence, which is expected to replace some routine jobs [3] Financial Performance and Analyst Outlook - The upcoming earnings report is anticipated on February 25, 2026, with an EPS estimate of $2.69, down from $2.78 year-over-year, and a revenue estimate of $11.18 billion, up from $9.99 billion year-over-year [5][7] - The stock currently holds a Buy Rating with an average price target of $325.24, although it is trading near its 52-week low of $185.73, having decreased by 2.49% to $189.20 in premarket trading [6] - Recent analyst actions include Piper Sandler lowering its target to $280.00, Barclays raising its target to $338.00, and RBC Capital raising its target to $290.00, indicating varying outlooks on the stock's future performance [7] Valuation and Market Position - Salesforce's current P/E ratio stands at 25.9x, indicating a premium valuation compared to peers [7] - The company is rated weak in value (score: 7.28), strong in growth (score: 65.51), and strong in quality (score: 73.45), reflecting a healthy balance sheet despite underperforming in momentum (score: 7.09) [7]

Core Insights - SGA's U.S. Large Cap Growth Strategy reported a Q4 2025 portfolio return of 0.3% (Gross) and 0.2% (Net), underperforming the Russell 1000 Growth Index (1.1%) and the S&P 500 Index (2.7%) [1] - The portfolio faced significant challenges in 2025, marking the most difficult year since the firm's inception in 2003, but remains optimistic about growth potential and relative valuation [1] - The strategy is positioned to benefit from a shift away from high momentum dynamics in U.S. markets and a broadening of market leadership [1] Company Focus: Salesforce, Inc. (NYSE:CRM) - Salesforce was highlighted as a top contributor in Q4 2025, despite a one-month return of -19.51% and a 52-week loss of 40.19% [2] - As of February 9, 2026, Salesforce's stock closed at $194.03, with a market capitalization of $184.717 billion [2] - The company demonstrated growth stabilization and momentum, with subscription revenue growth and current remaining performance obligation (cRPO) exceeding guidance [3] - Management is targeting revenue acceleration over the next 12-18 months, supported by increased competitiveness in the SMB segment and the expiration of pandemic-era shelfware deals [3] - Salesforce's AI and Data Cloud offerings are gaining traction, with Agentforce annual recurring revenue growing over 300% and Data Cloud annual recurring revenue more than doubling [3] - The company's integrated front-office applications, strong brand, and high renewal rates continue to drive revenue growth, while disciplined capital allocation and share repurchases enhance shareholder returns [3] - Salesforce is well-positioned to compete in the Agentic AI era, supporting low-teens earnings growth over the next three years [3] - The portfolio maintained an average weight in Salesforce and increased the position by selling other higher multiple software holdings [3]

Core Viewpoint - Software stocks are expected to rebound from historic lows as the market has overly pessimistic expectations regarding AI's short-term disruption of the software industry, according to JPMorgan strategists [1][5]. Group 1: Market Sentiment and Stock Performance - The software sector has fallen to its lowest level since the market turmoil in April last year [4]. - Concerns over new AI tools potentially disrupting traditional Software as a Service (SaaS) business models have led to sustained pressure on U.S. software stocks [1][5]. - The recent sell-off did not differentiate between companies with AI partnerships or proprietary data assets, affecting nearly all related software companies equally [1]. Group 2: Company Resilience and Long-term Outlook - Companies like Microsoft and CrowdStrike are highlighted as resilient players in the AI space, likely to benefit from AI-enhanced workflow efficiencies [5]. - The high switching costs and long-term contracts in enterprise software provide a buffer against short-term disruptions [5]. - The long-term fate of traditional software companies in the face of AI remains uncertain, but current market pessimism appears to be an overreaction [5]. Group 3: Analyst Perspectives - Analysts from Morgan Stanley believe that U.S. tech stocks still have room for further gains, and the decline in software stocks has created an attractive entry point [5]. - Wedbush analysts argue that the market's reaction to AI risks is excessive, suggesting that the current sell-off implies an extreme assumption of widespread AI disruption, which is not feasible [6]. - The caution of enterprise clients regarding AI migration is emphasized, as many are reluctant to expose core data to immature new platforms [6]. Group 4: AI Integration and Market Dynamics - The narrative that AI will replace entire enterprise software stacks is overly simplistic; the value density of enterprise software lies in proprietary data and compliance structures [8][9]. - AI is more likely to integrate as embedded tools within existing software platforms rather than completely replacing them [6][9]. - The current sell-off reflects a market response to the question of how much profit pools in SaaS will be redistributed due to AI [10]. Group 5: Future Indicators and Investment Strategy - The rebound in software stocks may depend on two hard indicators: the speed of real deployment and payment expansion by enterprises, and the elasticity of SaaS companies' AI-related product revenues [10]. - Companies with strong data assets and solid fundamentals, such as Microsoft, MongoDB, Snowflake, Palantir, and SAP, are likely to experience a robust rebound post-panic [10].

For Immediate ReleaseChicago, IL – February 10, 2026 – Today, Zacks Investment Ideas feature highlights iShares Expanded Tech-Software Sector ETF (IGV) , AppLovin (APP) , Palantir Technologies (PLTR) , Salesforce (CRM) , ServiceNow (NOW) and Robinhood Markets (HOOD) .5 Top Software Stocks Investors Can Buy NowSoftware stocks, long viewed as some of the market’s most attractive business models, have been hit hard in recent months as investor concerns around artificial intelligence and large language models i ...