Salesforce Drops $27 Billion on Stock Buybacks Amid 'SaaSpocalypse' Fears

Salesforce's CEO Marc Benioff has been calling it the 'SaaSpocalypse,' but his company is taking steps to combat the fear that artificial intelligence agents will disrupt its software-as-a-service business. The company spent a record $27 billion on stock buybacks in the first quarter, which is nearly 19% of its market cap as of April 30. This massive repurchase signals confidence in Salesforce's growth trajectory and suggests that management believes the current stock price may be undervaluing the company's long-term earnings power.

Benioff has signaled his willingness to accelerate repurchases when he sees a meaningful gap between the stock price and the company's long-term value. The buybacks have already had an impact, with diluted shares outstanding falling 11% in the quarter and boosting non-GAAP EPS by $0.23.

Despite some weakness in legacy areas like commercial cloud and Tableau, Salesforce's total first-quarter revenue beat consensus, rising 13% year over year to $11 billion. The company also reported strong free cash flow of $6.6 billion, providing the financial flexibility to fund buybacks at this scale.