Salesforce Stock (CRM) Stays Strong in the SaaSpocalypse

Salesforce (CRM) stock continues to show resilience in the ongoing SaaSpocalypse, even as the broader software sector remains under pressure. While the artificial intelligence (AI) disruption narrative has clearly intensified across software, the broad-based nature of the decline suggests this is much more of a generalized de-rating than a company-specific breakdown. From that perspective, whether the market is accurately pricing Salesforce’s AI exposure — or simply extrapolating a worst-case scenario across the entire sector — I think there’s an asymmetry in the setup, especially with the stock now trading in what looks like deep-value territory.

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Over the long run, though, I’d expect that asymmetry to correct, which is why I’m bullish on Salesforce.

Why SaaS Is Being Repriced Across the Board

SaaS companies have been living through something close to pandemonium over at least the past six months, and Salesforce has been no exception. When we look at the recent performance of the top 10 holdings in the iShares Expanded Tech-Software Sector ETF (IGV), it’s clear that CRM has seen a sharp devaluation of nearly a quarter of its market cap, broadly in line with its sector peers.

Going into the central theme driving tech right now, what we’re seeing is essentially a coordinated sell-off across high-quality software names — even among so-called “AI winners” like Microsoft (MSFT) and Palantir (PLTR). That alone suggests this isn’t an isolated issue, but rather a broader regime shift underway.

At its core, the market is re-rating SaaS companies on the view that their traditional model may be getting commoditized by AI. What used to be seen as complex products with strong lock-in and pricing power is now facing pressure from open-source tools that reduce that differentiation. The clearest sign of this pessimism is in capital flows: tech capex is increasingly being directed toward infrastructure such as graphics processing units (GPUs) and data centers, while software multiples compress and infrastructure players continue to command a premium.

Salesforce Is Not the Weakest Link, But It’s Not Immune Either

In my view, Salesforce is not among the most fragile companies in this “SaaSpocalypse,” but it’s not immune either. By controlling workflows, permissions, customer context, and especially the integration across systems and operational data, Salesforce is far more defensible than point solutions or lighter software suites that are easier to replicate.

At the same time, there are real sources of pressure. The shift from seat-based pricing to consumption or agent-based models naturally compresses pricing, and the risk that AI reduces the importance of the interface layer also introduces new vulnerabilities to the CRM thesis.

That being said, I don’t think it’s obvious that the market is getting this right by tossing Salesforce into the basket of companies that AI will simply disrupt. The most recent numbers, reported in February, still point to a very healthy business: quarterly revenue grew 12% year-over-year, total remaining performance obligation (RPO) reached $72.4 billion, and guidance for FY27 sits at a midpoint of approximately $46.1 billion, representing 11% year-over-year growth, alongside non-GAAP operating margins of 34.3%.

Importantly, AI is not just a threat here. It’s already being integrated into the model with early signs of monetization. Salesforce generated $800 million in Agentforce annual recurring revenue (ARR) over the year, alongside 2.4 billion Agentic Work Units (AWUs) and 20 trillion tokens processed.

The Risk of Becoming Infrastructure

The more bullish side of the story also comes with an important caveat. Even if Salesforce doesn’t see its business model eroded by AI, there’s still a scenario in which it shifts more toward becoming back-end infrastructure rather than a premium front-end. In other words, AI agents could start operating on top of the CRM system, reducing the importance of the traditional interface — and, in turn, weakening the pricing power of the classic per-seat model.

Salesforce’s guidance points to FY27 top-line growth of around 10–11%, roughly in line with FY26. While the company is successfully defending its margins, consensus expectations for low-double-digit earnings per share (EPS) of about 5.3% suggest the market has yet to price in a true AI-driven reacceleration. The issue is that in a “SaaSpocalypse” environment, mere stability risks being viewed as stagnation; without a clear signal that FY28 can break back into the mid-teens, the stock may struggle to re-rate.

Looking at it more coldly from a fundamentals perspective, it’s hard to argue that Salesforce isn’t already in value territory. The stock is trading at just roughly 14x non-GAAP earnings, well below its five-year average of around 34x. If we take a consensus EPS CAGR of 17.5% over the next three to five years, that implies a PEG of roughly 0.84 at current levels — which, in my view, points to undervaluation.

Is CRM a Buy, According to Wall Street Analysts?

Despite Salesforce’s recent bearish momentum, analysts remain fairly optimistic on CRM over the next 12 months. Of the 37 ratings issued in the past three months, 28 are Buy, eight are Hold, and just one is Sell— resulting in a “Moderate Buy” consensus. The average price target stands at $264.94, which implies an upside of roughly 35.9% from the current share price.

A Favorable Risk-Reward Despite the Noise

Fundamentally, I don’t see enough concrete reasons to invalidate the view that, at about 14x forward earnings, Salesforce is already trading in deep-value territory. On the other hand, the market’s concerns around moat erosion and a potential AI-driven shift in the business model can still push multiples lower from here.

That said, given that Salesforce appears more insulated than many of its software peers when it comes to these risks, I think the market will eventually recognize this asymmetry — even if it takes a few more months. Much of this insulation comes from owning the system of record for customer data, which remains a key advantage even as AI layers become more commoditized.

At current valuation levels, this sets up what I see as an attractive risk-reward, supporting a buy rating on CRM.

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