TITLE: Salesforce: AI Hype vs. Cold, Hard Numbers
The market's always a mixed bag of hope and fear, and Salesforce (CRM) is no exception. Shares jumped recently on ambitious revenue targets, specifically hitting $60 billion by the end of the decade. That's a compound annual growth rate (CAGR) of over 10%. The claim aims to squash worries about growth slowing down and competition from AI. But let's be real, a 10% CAGR in the software world isn't exactly lighting the world on fire, is it?
Cracking the Code: Growth, AI, and Share Buybacks
Salesforce is touting its AI initiatives, and they are seeing some traction. Data Cloud and AI annual recurring revenue (ARR) supposedly grew over 120% year-over-year, hitting $1.2 billion in the second quarter of 2026. Impressive, sure. But let's put that in perspective. If overall revenue is projected to be $60 billion, that $1.2 billion represents a mere 2% of the total pie. Is 2% enough to justify the AI hype? I'm not convinced.
And then there's the $7 billion share repurchase program. Companies love these things because it makes the stock look artificially scarce, juicing the price. It's financial engineering, not organic growth. What I want to know is, where's that money really coming from? Are they cutting back on R&D, or acquisitions that could actually fuel long-term growth?
Here's where it gets interesting. Achmea Investment Management B.V. increased its stake in Salesforce by 9.2% in the second quarter (according to their recent SEC filing). Achmea Investment Management B.V. Increases Stock Holdings in Salesforce Inc. $CRM But before you jump on the bandwagon, consider this: the total holding is only 148,254 shares. In the grand scheme of a company with a market cap north of $240 billion, that's a rounding error. And several analysts have lowered their price targets. UBS Group, for example, dropped theirs from $300 to $260. Macquarie has a "neutral" rating with a $250 target. It's a mixed signal, to say the least.
The Agentforce Mirage
They're pushing "Agentforce" as a success story, with over 12,000 customers. Okay, but what's the average revenue per Agentforce customer? That's the number I want to see. Are these massive enterprise deals, or a bunch of small businesses kicking the tires? The company expects a potential three to four times ARR uplift among businesses expanding their use of agentic AI solutions. Potential is the key word. I've seen plenty of "potential" uplifts that never materialize.
And here's the part of the report that I find genuinely puzzling. The most popular narrative values Salesforce at $334.68 per share, almost $80 higher than the current price. The calculation depends on "bold expansion bets, potential future margin improvements, and an aggressive revenue roadmap most investors haven’t seen." What aggressive roadmap? Why haven't investors seen it? It sounds like someone's selling a dream, not a data-backed projection.
The Forecast? Cloudy with a Chance of Overvaluation
Salesforce is caught in a tug-of-war. On one side, you've got the AI hype, the share buybacks, and the rosy projections. On the other, you've got slowing growth, increased competition, and a valuation that seems detached from reality. The question isn't whether Salesforce is a good company. It's whether the current stock price reflects its actual potential, or just wishful thinking.
