SalesForce.com Inc. (CRM)

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.

The best years of growth are behind them. Initially AI will help workers use software but could it then replace the workers themselves. In other words will AI help people do their jobs or will it do their jobs for them. There is a big debate over companies that have millions of subscribers or users: will this business model do OK in the world of AI. Even with AI taking over jobs there still has to be people who supervise and make sure the quality control is there.

Let's look at a 5-year chart. Hates the company. Expensive and difficult to deal with. Once upon a time, everybody's go-to choice for CRM. There are more options today. Overvalued. He might look at it if it got back to the range of late 2022. 

Thinks the stock will see failed rallies as it consolidates. It'll underperform.

The software stock margins have really compressed. Last month, CRM talked about 10% growth over 3-5 years. It's a high cash-flow machine. When growth returns to double digits the stock will re-rate and multiples expand.

The issue was they were behind in AI. CRM is run well. He's considering this stock. 

Volatile, more risk with a bouncy stock like this. Old resistance level became new support of $240-ish. Bounced off the first time in 2024, and looks to be bouncing off a second time. As long as it maintains the bounce, should test at least $300 again. So far, so good.

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. 

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

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.

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.

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.