Salesforce Drops $27 Billion on Record Stock Buyback to Combat AI Threat

Salesforce's stock price plummeted nearly 60% in mid-2026 due to concerns over the impact of generative AI on its software-as-a-service (SaaS) business, dubbed the 'SaaSpocalypse' by CEO Marc Benioff.

To combat this trend, Benioff led a massive effort to buy back $27 billion worth of shares in a single quarter, with $25 billion funded through debt and the remaining $2 billion from cash flow.

The company's management believes that its stock is undervalued, trading at just 14 times forward earnings, making it cheaper than issuing new equity. They also estimate that the cost of equity is higher than the interest rates on the bonds issued to fund the buybacks, ranging from 4.5% to 6.7%.

Salesforce's efforts are focused on expanding its artificial intelligence services, Agentforce and Data 360, which work together to enable businesses to create custom AI agents within the Salesforce software ecosystem. The combined annualized recurring revenue for these services doubled year over year last quarter, showing strong momentum.