Salesforce (NYSE:CRM): The world’s top CRM software, destined to gain from AI

Salesforce (NYSE:CRM) was in the SaaS/cloud space so long ago that back at that time (in the early 2000s) it was not even a thing. Most in our Australian audience will have heard of this company and used its software, which since 2021 has included Slack. They may also know it has a 55-storey office tower named after it in Sydney that opened in 2022 and is currently the Harbour City’s tallest office building.

But they may not know it is listed on the NYSE and is capped at US$262bn. It has been a victim of the Saaspocolypse, there is no denying that given the ~50% slump in the last year. But we think it is set to benefit AI, not because it is in a space that is tough to automate with AI agents, but it is doing the automating itself. Let’s take a deep dive into the company.

Salesforce: A cloud pioneer

The company began in 1999, founded by former Oracle executive Marc Benioff in a one-bedroom flat in San Francisco with 3 business partners: Parker Harris, Dave Moellenhoff and Frank Dominguez.

Benioff, who is still with the company today and owns 2% of the company, thought software shouldn’t be installed in standalone platforms inside the company’s walls, but available over cloud infrastructure – reducing costs and increasing efficiency. The irony is despite leaving Oracle and going against one of Oracle’s business models, Benioff’s former boss Larry Ellison was one of the earliest investors.

In the early years, it grew through word of mouth and at conventions, particularly its own Dreamforce annual conventions that began in 2003. It completed an $110m IPO in 2004. By 2009, Salesforce had over US$1bn in revenues and 55,000 customers. In the 2010s, it grew through branching out into new industries and through acquisitions including email service provider ExactTarget for $2.5bn and cloud integration vendor MuleSoft.

Salesforce survived troubles including the dot com bubble, GFC, a notorious cyberbreach in 2007 and being cited for (legally) paying no tax in 2019. In 2020, it bought work communication software company Slack for $27.7bn, a deal than the 2nd largest software deal on record only after IBM’s US$34bn purchase of Red Hat but ahead of Microsoft’s purchase of LinkedIn. Like Facebook’s purchase of WhatsApp in 2014, you could argue it hasn’t delivered so far as revenues are concerned (US$1.7bn in 2023), but is important strategically given its extensive use.

Caught up in the Saaspocolypse

Salesforce’s most recent results (for CY25 which were reported February 2026) showed a company still growing, but no longer at the hyper‑growth rates of the 2010s. Revenue came in at US$39.8bn, up 5% year‑on‑year. Subscription and support revenue accounted for US$37.4bn. Operating cash flow was US$14.2bn, up 8%. Net income, or profit, was US$6.8bn, equivalent to US$8.30 EPS on the current 819m share count.

For 2026, the company guided to revenue of US$42.0–42.5bn and EPS of US$8.90–9.05. That implies FY26 net income of US$7.29–7.41bn, or roughly 7–9% growth. Analysts are slightly more optimistic, with consensus sitting at US$42.3bn revenue and US$9.12 EPS, which translates to US$7.47bn net income. For FY27, the Street expects US$45.8bn revenue and US$10.35 EPS, equivalent to US$8.48bn net income.

On these numbers, Salesforce trades at a P/E of ~23x, an EV/EBITDA of ~15x and a PEG: ~1.2x. The consensus target price: is US$372 (with estimates ranging from US$255–US$460) These can’t be described as ‘bubble multiples’. We think they are the multiples of a mature software company with strong cash flow, modest growth, and a large installed base. Granted, the question is whether AI can re‑accelerate the business is a legitimate one, but one we think can be answered in the affirmative.

Salesforce’s long‑term strategy is now anchored to AI agents: autonomous systems that can complete tasks, make decisions and interact with customers without human intervention. The company unveiled Agentforce in late 2024, positioning it as the next evolution of CRM. The pitch is that AI agents can triage customer issues, generate personalised responses, update records, initiate workflows and even execute transactions.  The company has also been linked to a potential acquisition of Informatica, the data‑management software provider. Informatica would give Salesforce deeper control over the data pipelines that feed AI models. It is this rather than any desire for scale that explains the strategic interest. AI agents are only as good as the data they can access.

One of the more unexpected developments of the past year has been the impact of US tariff policy on enterprise software. The Trump administration’s tariff expansions have created uncertainty for global supply chains, and Salesforce has responded by developing an AI‑powered “tariff agent” capable of instantly processing changes across all 20,000 US customs categories. This is a classic Salesforce move: turning macro volatility into a product opportunity. The company is vulnerable to market swings, but it is also positioned to monetise them. If tariffs remain a central feature of US policy, Salesforce’s compliance‑automation tools could become a meaningful revenue stream.

We need to touch briefly on Slack which remains one of the most debated acquisitions in modern software history. Salesforce paid US$27.7bn for it in 2020, making it the second‑largest software deal ever completed. Slack generated US$1.7bn in revenue in 2023 and around US$2.0bn in 2025 — respectable, but not transformational. But maybe now, the strategic value is becoming manifest. Slack is deeply embedded in enterprise workflows. So what? Well, it is a natural interface for AI agents and it gives Salesforce a communications layer that rivals Microsoft Teams.

Growth in the short-term and long-term

Salesforce is no longer a 20–30% growth company. The FY26 guidance of 7–8% revenue growth reflects a business that has reached scale. The Street expects mid‑single‑digit growth for the next two years. We think you could argue that the sell off was not really part of a Saaspocolypse sell off at all but the fact that the market wants more than stability. It wants acceleration. Salesforce is betting that AI agents will do just this, to the point where its agents become as ubiquitous as CRM itself. The company has the distribution, the customer base, the data and the brand to make that happen.

This said, the risks are real. First, the competitive landscape is intense. Microsoft is embedding AI deeply into Teams, Office and Dynamics. Google is pushing AI into Workspace. Start‑ups are building agent‑first platforms from scratch. Salesforce has the advantage of incumbency, but incumbency can be a burden if customers are slow to adopt new features.

Second, the economics of AI are still uncertain. Training and inference costs remain high. The industry has not yet proven that AI agents can deliver margin expansion at scale. Investors want evidence, not promises. Third, the acquisition strategy carries risk. Informatica would be a large deal. Integrations are never easy. Salesforce has a mixed track record: MuleSoft was a success, Slack is still debated. Fourth, the macro environment is volatile. Tariffs, rates, geopolitics and enterprise‑spending cycles all affect Salesforce’s quarterly results. The company is exposed to every twist in the US economy.

Bottom line

Salesforce is the world’s largest CRM provider, a cloud pioneer, and a company with one of the strongest enterprise software franchises ever built. It has a massive installed base, recurring revenue, strong cash flow and a clear strategic direction.

But it is also a company at an inflection point. The next decade will be defined by whether AI agents become a mainstream enterprise tool — and whether Salesforce becomes the platform that powers them. If AI agents succeed, Salesforce could re‑accelerate to double‑digit growth. If they do not, Salesforce will remain a steady, cash‑generating software giant with mid‑single‑digit growth.
Either outcome is viable. Only one justifies a premium multiple.