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

Core Thesis - Salesforce, Inc. is positioned as a leading player in the AI-enabled CRM market, with a strategic pivot towards integrating AI into its business model, emphasizing "agentic enterprises" to enhance productivity and decision-making [2][5]. Financial Performance - In Q2 FY2026, Salesforce reported revenue of $10.2 billion, reflecting a 10% year-over-year increase, with subscription and support revenue growing to $9.7 billion [2]. - The company maintained robust profitability, with a GAAP operating margin of 22.8% and a non-GAAP margin of 34.3%, indicating effective cost management [3]. - Forward-looking indicators are positive, with current remaining performance obligations (cRPO) increasing by 11% to $29.4 billion, and large deals over $1 million rising by 26% year-over-year [3]. AI Integration and Innovations - Key innovations such as Agentforce and Data Cloud are central to Salesforce's strategy, with AI ARR surpassing $1.2 billion, up 120% year-over-year, and Agentforce securing over 12,500 deals [4]. - The company has effectively utilized its own tools, achieving a 77% resolution rate on over 1.4 million support requests while reducing support headcount by nearly 40% [3][4]. Capital Returns and Guidance - Salesforce returned $2.6 billion in capital during Q2 and expanded its repurchase program by $20 billion, supported by projected operating cash flow of nearly $15 billion for FY26 [4]. - The company raised its FY26 revenue guidance to $41.1–41.3 billion and adjusted its non-GAAP margin to 34.1%, reflecting confidence in its execution and growth potential [5]. Market Position and Competitive Landscape - Despite macroeconomic pressures and competition from Microsoft and Adobe, Salesforce's AI-driven growth narrative remains compelling, with significant upside linked to the successful monetization of its agentic enterprise strategy [5][6].