Salesforce Drops $27 Billion on Stock Buybacks Amid AI Fears

Salesforce spent $27 billion on stock buybacks in the first quarter of this year. This record-breaking amount was used to repurchase shares that had been trading at historically low valuations, despite concerns about the impact of AI on the company's business model.

The debt used to fund these buybacks carries interest rates ranging from 4.5% to 6.7%, but CEO Marc Benioff believes the cost of equity is even higher. He thinks that by taking on this debt, Salesforce can reap long-term benefits and drive strong earnings-per-share growth.

The company's accelerated share repurchases are an indication that management believes its business will rebound in the second half of this year. Salesforce is guiding for revenue acceleration, fueled by its artificial intelligence services Agentforce and Data 360, which enable businesses to create custom AI agents within the Salesforce software ecosystem.