Palihapitiya Reverses Stance on Salesforce Valuations
Billionaire venture capitalist Chamath Palihapitiya has reversed his earlier stance on Salesforce's (CRM) software-as-a-service (SaaS) sector. Just months ago, he predicted a major SaaS meltdown driven by artificial intelligence, but now he believes valuations will 'snap back' after the company's strong second-quarter results.
Salesforce reported 11% revenue growth and more than doubled adjusted earnings per share. The company also raised its fiscal 2027 revenue outlook to between $46.1 billion and $46.4 billion, causing a rally in software stocks. CRM stock soared 23% on Thursday, marking its second-best session on record.
Palihapitiya praised CEO Marc Benioff as 'too good' and said he expects Salesforce to make good deals as the AI ecosystem evolves. He noted that AI models require tight integration with systems of record, echoing Benioff's view that established enterprise platforms will rely on AI agents rather than making them obsolete.
The company's results helped ignite a broader software rally, with CrowdStrike (CRWD) jumping 21% and Veeva Systems (VEEV) surging 15%. The iShares Expanded Tech-Software Sector ETF (IGV) jumped 8%, compared to a 1.4% gain for the Invesco QQQ Trust (QQQ).