Down More Than 30% This Year, Could Salesforce Be an Underrated Artificial Intelligence Stock to Buy Right Now?

Salesforce reported Q1 revenue of $11.13 billion, ahead of the $11.05 billion consensus, and adjusted EPS of $3.88, well above the $3.12 estimate. Guidance was slightly light at $11.27 billion-$11.35 billion versus $11.36 billion expected, even as Agentforce annual recurring revenue rose 205% to $1.2 billion. The stock is down more than 30% this year and trades at about 13x forward earnings, but the article argues the AI benefit case is still unproven.

Analysis

The market is treating CRM as a referendum on whether AI compresses software moats faster than it expands TAM. The key second-order issue is that a strong quarter with weak guidance usually means customers are still committing to seat-based and workflow spend, but management is not yet seeing enough net-new budget conversion from AI to justify a re-rate. That creates a narrow window where the stock can stay depressed even if operating execution is solid, because investors want proof of incremental monetization, not just retention.

The bigger hidden variable is competitive substitution inside the enterprise stack. If Agentforce adoption is real but not yet material enough to lift guidance, it may actually be a sign that buyers are testing AI copilots from multiple vendors before standardizing; that delays wallet share gains and could cap CRM’s multiple for several quarters. On the flip side, this same experimentation phase can be positive for infrastructure names: as enterprises pilot agentic workflows, demand intensity for model training, inference, and integration layers tends to migrate upstream before app-layer winners are obvious.

The valuation signal is tempting, but cheap software often stays cheap when the market believes growth is decelerating structurally rather than cyclically. The risk is not a near-term earnings miss; it is a 6-12 month narrative failure where AI features become table stakes and CRM is forced to defend pricing or bundle more aggressively, pressuring margin quality. A rerating likely needs a cleaner proof point: either sustained ARR acceleration from Agentforce or evidence that AI is expanding deal sizes instead of merely preserving renewals.

The contrarian view is that consensus may be overfocusing on whether AI helps CRM directly, when the first durable monetization may be indirect: partner ecosystem, implementation services, and adjacent compute/network demand. If CRM remains range-bound, that is not necessarily bearish for the broader AI complex; it may just mean value is shifting away from application-layer incumbents toward picks-and-shovels beneficiaries. In that sense, the stock’s weakness could be an input signal for rotating capital into faster-cycle AI infrastructure rather than a standalone buy-the-dip setup.

Key Decisions for Investors

• Avoid initiating a fresh long in CRM until the next guide-and-tell cycle confirms AI-driven revenue acceleration; near-term upside is capped unless management shows ARR conversion into the model, not just product adoption.
• Consider a pair trade: long NVDA / short CRM for the next 1-3 quarters. If agentic AI spend is real but app-layer monetization is delayed, the value accrues upstream first; risk is CRM re-rates on a surprise guide raise.
• Use CRM weakness only for a tactical trade, not a core position: sell cash-secured puts or put spreads 1-2 earnings cycles out to harvest elevated uncertainty premium, with defined downside if guidance fails again.
• Watch for a re-entry trigger in CRM on any evidence of net retention inflection or management commentary that Agentforce is expanding deal size. A break above the 200-day average on improving guidance would be the first credible confirmation signal.
• If you want AI exposure with better second-order leverage, favor infrastructure over application-layer laggards over the next 6-12 months; the early beneficiaries of enterprise agent adoption are more likely to be NVDA than CRM.