Salesforce (CRM) stock looks like a high-quality software platform trading at a discount, as sentiment has shifted toward its peers amid the rise of artificial intelligence (AI). The stock is roughly 39% below its 52-week high, reflecting a significant valuation reset. In markets, the best opportunities often emerge when sentiment turns negative, and I believe this is one of those cases. When stocks are booming, I like to sell, but not too early. When good stocks have fallen deeply in price, I like to buy, but again, not too early. I’m bullish on CRM, and it’s not too early to buy it in my opinion.
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Why I’m Bullish on Salesforce Stock
To start with, I remind myself that Salesforce is not a broken business. Fiscal 2026 revenue reached $41.5 billion, which is up 10% year-over-year. Moreover, subscription and support revenue was $39.4 billion, about 95% of sales. This is a large, recurring-revenue business with real scale, a massive customer moat, and room to compound if execution merely stays solid.
There’s also a massive backlog here to contend with. The company ended Fiscal 2026 with remaining performance obligations of $72.4 billion, up from $63.4 billion a year earlier. Currently, customers are not fleeing the platform, so the stock weakness looks more like skepticism than a fundamental impairment to me.
The best part of the business is its cash flow. The company generated about $14.2 billion in trailing 12-month operating cash flow and roughly $13 billion in free cash flow as of Q3 FY26. That gives the stock an 8.5% trailing free-cash-flow yield, based on a market cap of roughly $167.95 billion.
Also, management itself is acting like the shares are cheap. Salesforce returned $14.3 billion to shareholders in Fiscal 2026, including $12.7 billion in buybacks and $1.6 billion of dividends. It also authorized a new $50 billion repurchase plan and lifted the quarterly dividend to $0.44. Basically, management has made the call itself: the market is underpricing the franchise.
Why AI Traction Doesn’t Concern Me
The AI traction is real, and ignoring the risks would be remiss. However, Salesforce being disrupted by new AI companies contradicts the current reality. Agentforce’s annual recurring revenue (ARR) reached $800 million, which is up 169% year-over-year. The ARR of Agentforce and Data 360 exceeded $2.9 billion, up more than 200%. Salesforce also says that it has closed over 29,000 Agentforce deals, which clearly shows customer interest is present and healthy.
Fiscal 2027 revenue guidance is $45.8–$46.2 billion, or up 10%–11%. However, management says that it will be H2 when reacceleration is proven. As markets price in about 12 months prior, I expect a rebound in valuation in the second half of 2026.
Management’s long-term case is also ambitious. There’s no guarantee this will definitely work out, as hurdles need to be surmounted, but Salesforce expects Fiscal 2030 revenue of about $63 billion. That creates a floor of internal confidence, making me more sure of my investment.
A Low Valuation Can Mean a High Return
Technically, the stock looks washed out, but that’s often when I like to buy most. Current readings show a 14-month relative strength index (RSI) that’s near historical lows, which is close to the classic long-term oversold threshold. Sentiment is poor, momentum remains negative, and that is usually when inversion setups first begin to form.
If the stock merely moves back up soon to the 200-week moving average, that’s a 27% increase. If the stock moves back up soon to the 50-week moving average, which it has done in historical drawdowns like this, the return would be 32.5%. As you can see, that’s a strong return if just held until average normal sentiment returns. If it reaches all-time highs, the return would be 95%.
Is CRM a Good Stock to Buy Now?
On Wall Street, Salesforce has a consensus Moderate Buy rating, based on 28 Buys, eight Holds, and one Sell. The average CRM price target is $264.94, which indicates a 47.76% upside potential over the next 12 months. This shows that my own bullish estimates are not out of sync with institutional consensus and provides a floor of sentiment support behind my investment.
Goldman Sachs (GS), a firm I follow closely, has Gabriela Borges covering CRM stock. She predicts a 56.71% upside over the next 12 months.
I’m Staying Bullish on CRM Stock
I’m very selective about the stocks I buy; CRM is one of them. With a price below the 200-week moving average and strong forward guidance, I think a 30% 12-month return is well within reach. In fact, I’m aiming for a lot higher. I admit there are risks with the novelty of the AI landscape, but Salesforce doesn’t seem to be resting on its laurels. In fact, from what I understand, AI is at the core of its strategy. To be frank, the selloff looks like negative hysteria to me. I like buying when there’s a mispricing, and there’s a mispricing here indeed.