Salesforce Stock Attracts Investor Despite AI Concerns

One investor has been buying Salesforce stock throughout this year despite Wall Street's concerns that AI would replace its business model. The investor believes that management at Salesforce has provided evidence that AI is actually unlocking more value for the company.

The investor points to Agentforce ARR, which hit $1.5 billion and combined Agentforce and Data 360 ARR reached nearly $3.90 billion, up over 210% year-over-year. Marc Benioff stated on a Q2 call that 'AI isn't replacing Salesforce. It's unlocking more value across all four layers of our platform.'

The investor also highlights the company's cash flow and buyback math, with free cash flow yield sitting at 7.50% and price-to-free-cash-flow at 13.33. The diluted share count has fallen to 821 million from 962 million a year ago thanks to a $25 billion ASR, with a new $50 billion repurchase authorization behind it.

The investor believes that the company's forward P/E of 14 and 7.50% free cash flow yield make it an attractive investment opportunity compared to Microsoft, which has a higher valuation.