Salesforce Stock Attracts Repeat Buyers with Strong Fundamentals

Salesforce (CRM) is a stock that has been attracting the attention of investors due to its strong fundamentals and growth prospects. One reason for this interest is the company's ability to provide context to AI models, which is essential for their effectiveness. The author of the article, who is a repeat buyer of Salesforce shares, believes that the stock offers a compelling value proposition due to its low price-to-free-cash-flow ratio of 14.

The company has been generating significant free cash flow, with $14.402 billion in fiscal 2026, representing a growth of 15.83% year-over-year. This has enabled Salesforce to return capital to shareholders through a $25 billion accelerated share repurchase program, which is expected to retire at least 14% of shares outstanding.

The author also highlights the strength of Agentforce ARR, which crossed $1.5 billion in Q2 FY27, representing a growth of over 240% year-over-year. This, combined with Data 360, brings the total ARR to near $3.9 billion. The customer voices matter more to the author than the numbers, and Xero's experience with Agentforce service agent is cited as an example of its effectiveness.

The author believes that Salesforce owns the context, which is essential for AI models, and this is why they prefer owning CRM over ServiceNow (NOW), whose AI revenue today is less than 10% of company revenues. The risk lies in monetization design, but the author remains bullish on Salesforce's prospects.