Salesforce is down 26% in 2025. What’s next for AI agent giant?
00:00 Speaker A
What do you do with a stock like Salesforce and other software names that are under pressure due to concerns that AI will crash software? Are these value plays? Will you stay away from there?
00:15 Ines
So, the answer is really subtle. I also think that as investors we need to have a humility that we don’t fully understand; Artificial intelligence has the potential to automate many processes and many services. As you know, there are many sectors that artificial intelligence will affect. So does that mean that AI will completely evaporate the demand for these businesses, or can you see the opposite happening where AI stimulates demand, but the demand ultimately changes and there’s still some kind of underlying business opportunity there. I think it’s not just in the software, but also in the AI value chain, and particularly some of the AI adopters that we’re asking some of these questions about. I mean, I think the reality is you need to look at the fundamentals and focus on which companies look like they have competitive moats and strong positioning for at least the next few years of demand and which ones we see a lot of, uh, we have a lot more clarity on. And I would say to some software companies, what’s pretty remarkable is that enterprise adoption has actually increased this year. KPMG’s latest AI pulse research showed that the share of firms adopting AI intermediaries has tripled to 42% among large companies, and the average investment venture into AI is now 130 million. So there’s a lot of appetite to spend there, and I think the question is where is this going?
01:43 Speaker A
I have one last word for you, Ines. Yeah, I think it wasn’t a very good Dreamforce for Marc Benioff. He made some comments about his support for President Trump and perhaps a desire to have the National Guard flow into San Francisco. It wasn’t good ground for her, but they offered guidance, Ines is very optimistic. And the street of people I’ve been able to talk to don’t necessarily believe that guidance. It’s like Salesforce isn’t at the AI rally at all, and it’s unclear to me when they might be.
02:14 Speaker B
No, they’re not taking part in it, but they’re challenging what they call this dying enterprise application software myth. And they look, we saw that you saw a slowdown. They’re trying to come back or they’re trying to say, look, we’re not dead and we’re going to continue to grow. The only question is whether they convince the street of this or not.
02:44 Speaker A
I should also point out that, as shown below the fold, Marc Benioff’s longtime friend Ron Conway has decided to leave one of his boards, I guess because of comments Marc made this week. There’s a lot going on there. I have more to say about this in my Morning Brief Sunday newsletter. But a big thank you to my opening bid roundtable. I love and appreciate analysis.
