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D.A. Davidson’s Gil Luria Right said in a recent program on CNBC that Salesforce Inc (NYSE:CRM) core business “suffered” because the company rushed to launch its AI technologies very early.
“The differentiation is between companies that have a core business that’s doing well, like ServiceNow, as opposed to companies with a core business that’s not doing well, like Salesforce. That’s the differentiation in application software, and that will only change when these upstarts come up and disrupt the core business. Until then, it’s going to be a slow roll, which is why Salesforce got in trouble — because they bet the farm on Agent Force before it was ready and they neglected the core business. That’s why you’ve seen this underperformance.”
Asked whether corporate America wasn’t yet ready for Salesforce Inc (NYSE:CRM) AI products, the analyst said:
“Companies aren’t ready because it’s really complicated to change your business software. If you think about the software you use every day at work, when’s the last time it changed? It doesn’t change very often. And you also have very high expectations for it. The results have to be exactly right. When we know that when we use AI software, it’s not exactly right, which we have a tolerance for as consumers and as employees, but in the technology stack, there’s no tolerance for the numbers being wrong. And so, it’s going to take time until we can use it in that context. So, yes, that’s correct — companies aren’t ready, but also Salesforce bet on it before it was even nearly ready, which is why the core business suffered.”
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Vulcan Value Partners stated the following regarding Salesforce, Inc. (NYSE:CRM) in its third quarter 2025 investor letter:
“Salesforce, Inc. (NYSE:CRM) is the world’s leading SaaS vendor for customer relationship management (CRM) and salesforce automation (SFA) software, including AI agents. Salesforce offers many other products including software for marketing automation, customer service automation, analytics, application integration, and enterprise collaboration among others. Growth guidance for the upcoming quarter was slightly lower than anticipated leading some investors to question whether Salesforce’s growth was slowing and AI investments were not bearing fruit. These questions have been amplified by a bearish industry narrative that AI will take market share from enterprise software companies like Salesforce. We believe the company is poised for sustained growth and will actually benefit from AI. Salesforce’s software is deeply embedded in the enterprise. The company is expanding its product suite with multiple cloud offerings, proprietary data, and an emphasis on being an AI innovation leader. In addition, its customers would rather focus on running their businesses instead of designing, testing, maintaining, and securing internal AI products in an ever-evolving landscape. Salesforce is deeply entrenched within its customer base, has high retention, high recurring revenue, and is a very scalable business with high margin potential. Salesforce is dominant across its offerings and is constantly innovating with new products like Agentforce to deepen customer relationships and grow the business.
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