Salesforce Spends Record $27 Billion on Stock Buybacks Amid AI Fears

Salesforce's CEO Marc Benioff has taken on a record-breaking $27 billion in stock buybacks to combat what he calls the 'SaaSpocalypse.'

This massive bet is aimed at fighting the impact of generative AI, which could potentially disrupt Salesforce's business model by allowing companies to create custom software using 'vibe coding'.

The company issued $25 billion in debt to fund these buybacks, with interest rates ranging from 4.5% to 6.7%. Benioff believes that the cost of equity is higher than the cost of this debt, making it a smart move.

Salesforce's stock has been trading at historically low valuations, and its management expects revenue acceleration in the second half of the year, driven by its AI services Agentforce and Data 360. These services enable businesses to create custom AI agents within the Salesforce software ecosystem.