Salesforce's $25 Billion Debt Burden: A Risky Move on Capital Allocation

CRM's massive $25 billion debt issuance to fund its largest-ever accelerated share repurchase program has sparked concerns about the company's capital allocation strategy. The move, which was announced in March, saw Salesforce borrow $25 billion to buy back its own stock and cut its cash flow growth guidance for fiscal 2027 by half.

The decision marks a significant change in posture for CRM, which had previously funded share repurchases comfortably out of its own cash flow. With the company now shouldering a substantial debt burden, analysts are questioning whether this move is sustainable and if it will impact future growth prospects.