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 versus $3.12 expected. Guidance was slightly light, with Q2 revenue of $11.27 billion to $11.35 billion below the $11.36 billion estimate, 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 AI-related long-term benefits remain unproven.

Analysis

The market is still treating CRM as a referendum on whether AI is additive or cannibalistic to incumbents, but the sharper read is that the company has likely entered a multiple-compression phase where fundamentals need to re-accelerate faster than the AI narrative decays. A low forward P/E only matters if earnings quality holds; if AI features mainly preserve seats and pricing rather than expand net-new demand, the stock can stay cheap for longer than bulls expect. In that sense, the near-term setup is less about outright growth and more about whether management can show operating leverage without paying away the economics in discounts, services, or product bundling.

The second-order winner, if CRM can convert Agentforce into durable consumption, is the broader enterprise AI tooling stack: model providers, cloud infrastructure, and systems integrators that get pulled into large-scale deployments. The loser is any software vendor with weak workflow lock-in, because AI lowers switching costs and compresses differentiation. That creates a subtle cross-current: even if CRM stabilizes, the market may continue to re-rate adjacent SaaS names defensively until it sees proof that AI is increasing wallet share rather than merely increasing feature parity.

The key risk is timing. Over the next 1-3 quarters, sentiment can remain broken if guidance stays even slightly below consensus; over 12-24 months, the real risk is a slower structural erosion in seat-based pricing power. The contrarian view is that investors may be overestimating how quickly agentic AI commoditizes CRM workflows: enterprise buyers are slow, integration-heavy, and risk-averse, which can make the installed base more resilient than the bear case implies. That means the stock can be cheap and still not be a bargain until the company proves either durable reacceleration or a credible capital return story.

Key Decisions for Investors

• Avoid chasing CRM on the earnings beat; wait for either a post-call reset toward technical support or a second consecutive quarter of guidance inflection before adding risk. Near-term reward/risk is poor if the market is still punishing anything less than upside guidance.
• For investors already short weak SaaS, consider CRM as a relative long versus higher-multiple software names that lack its scale and installed base. Pair long CRM / short a basket of unprofitable AI-software beneficiaries to express 'quality at a discount' with lower single-name risk.
• If you want bullish exposure, structure it with options: buy CRM 6-12 month call spreads instead of stock. This captures a potential rerating if management proves AI monetization, while capping downside if the multiple continues to compress.
• Watch NVDA and the enterprise cloud cohort for confirmation trade, not as direct beneficiaries but as sentiment proxies. If CRM adoption translates into visible compute demand or partner commentary over the next 1-2 quarters, it strengthens the long case across the AI infrastructure chain.
• Do not short CRM aggressively solely on valuation; use any rally into strength to fade only if subsequent channel checks show slower seat expansion or a deterioration in renewal behavior. The risk/reward for a large outright short is unattractive unless fundamentals clearly roll over.