Shane Obata SalesForce.com Inc. CRM-N WATCH May 29, 2025

They've suffered because the results of their AI spend hasn't happened yet. It's starting to now. CRM dominates the market and doesn't face serious competition. She is seeing the enhancement in their software, which will result in better earnings.

CRM is like Uber in the $60s. Their last earnings were great. The CEO will focus on free cash flow and margins and growth. The market is completely missing this, expecting some sort of AI to take over what CRM is doing. Absurd. CRM is already using AI. Is unloved, caught in the hedgefund shorts. This can easily rally 20% after earnings.

Has owned this over a decade. Enterprise software is struggling these days, so he needs to see their next quarter before deciding.

The collection of data is becoming more important especially for corporations. It does well in software that collects consumer info and consolidates it, and is a global leader in this field. It is becoming an operating system for the modern enterprise and is delivering recurring revenue from AI and the data cloud. Trades at a good valuation of 22 times earnings and has expanding margins. She sees 40% upside and gives it an 8 out of 10 fundamentally.

Ranks CRM, Adobe and likewise the net losers in AI. CRM's growth has slowed in recent years. Is interesting long term, but if it falls further he will reconsider it.

Software as a service has done poorly this in this name and others, over fears that AI will take it over. He's been adding shares, though. Is well-positioned over many apps, the mid-20s valuation is reasonable and there are many institutional owners. In AI, we're moving out of building data centres and moving more to the software stage.

At 21x 2026 PE. Is a terrific business, but wouldn't buy heavily unless the price falls.

They're so successful that it seems that clients don't use their product as much. Also, clients have developed AI products to rely less on CRM.