SalesForce.com Inc. (CRM)

Still owns, but watching closely as the competitive landscape continues to evolve. Next leg of growth tied to AI, and that's where the debate is. AI is lowering barriers to entry, so market's reassessing its moat. Execution will be critical.

Strong support from a technical level. If it drops further, she'll sell and take the loss. Right now it's wait-and-see.

It will take time to play out, longer than the market expects. But these software companies are operating very strongly. Enterprise software is more customized than mass-market software which meet specific needs. He prefers the former for their more durable moats. CRM's PE is very low, around 11x, and the company is doing lots of good things. Remember that LLMs (AI) are very expensive to create and run, and these companies need to partner with large companies. It could wind up that AI companies partner with software companies. He doesn't know how it well pay out, but possibly the large software companies could win.

A name to look at in the beaten-up software space.

Today they reported a robust top and bottom line beat, but their full-year forecast was a little light, so shares fell after hours. They will buy back $50 billion shares, or a quarter of their share count. Fears of the AI apocalypse are overblown, fears of wiping out the entire white-collar class are wrong. CRM is too entrenched to go under. Trades at only 15x PE.

It reports this week. It keeps pace with AI by creating its own AI agents. It's -33% this year, but trades under 15x PE. AI is making each user more efficient.

(Note the short timeframe.)  Still likes, and wants to give it time. Software space finally getting back to attractive valuations. AI disruption fears are a bit overstated; weakness is sentiment, not fundamental. This company is embedding AI into its platform. Still seeing strong demand for its tools.

Lots of FCF last quarter. She sees over 70% upside from here.

Tool makes everyone in an office so much more efficient. Stock's always been fully valued, but now trading at 16-17x PE. Massive free cashflow. On his radar, his team is meeting about it next week.

Is -27% this year. Earnings growth expected at 12% this year. Trades at only 14x PE, their lowest ever. It's near a bottom.

Historically is well-run, but are very hard to deal with; he fired them once from his own business. Does not like CRM at all.

(Note the short timeframe.)  Didn't play out as she hoped, but still sees it doing well. Could be on the cusp of a technical turnaround. AI is embedded in how customers use the platform. Valuation remains reasonable at 22x forward PE. Strong cashflow, improving margins.

2025 saw strong outperformance in semis. The relationships between semis and software could see a mean reversion trade. Some of the software names that were dormant in 2025 may reawaken in 2026. CRM is up 18% since its Nov. 21 low, for example. 

SAAS faces the fear that AI will replace these companies' services and make them obsolete. In most, not all, cases good businesses will survive and thrive, because they will adapt. CRM will.