Investors’ Concerns Weighed on Salesforce’s (CRM) Stock

Mar Vista Investment Partners, LLC, an investment management company, released the “Mar Vista U.S. Quality Select Strategy” first quarter 2025 investor letter. A copy of the letter can be downloaded here. US stocks suffered their worst quarter in three years, with the steepest losses since 2022, due to tariff concerns and economic stagnation fears. In the first quarter, the strategy returned -3.05% net-of-fees compared to -4.49% and -4.27% returns for the Russell 1000® Index and the S&P 500® Index, respectively. Stock selection within healthcare, communication services, and consumer staples detracted from the fund’s performance during the quarter. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its first-quarter 2025 investor letter, Mar Vista U.S. Quality Select Strategy highlighted stocks such as Salesforce, Inc. (NYSE:CRM). Salesforce, Inc. (NYSE:CRM) offers Customer Relationship Management (CRM) technology that brings companies and customers together. The one-month return of Salesforce, Inc. (NYSE:CRM) was -4.72%, and its shares lost 3.09% of their value over the last 52 weeks. On April 24, 2025, Salesforce, Inc. (NYSE:CRM) stock closed at $264.70 per share with a market capitalization of $254.377 billion.

Mar Vista U.S. Quality Select Strategy stated the following regarding Salesforce, Inc. (NYSE:CRM) in its Q1 2025 investor letter:

“Salesforce, Inc.’s (NYSE:CRM) stock came under pressure in Q1 as investors grew concerned about the potential negative impact of trade tensions and tariffs on the global economy, as well as the current lack of monetization from AI-enabled software solutions. Despite these concerns, we remain confident in Salesforce’s strong competitive position, deep customer relationships, and its ability to monetize AgentForce, its newly launched generative AI-enabled chatbot designed to automate customer service tasks and significantly reduce costs compared to traditional call center support solutions.

As the largest provider of SaaS-based customer relationship management software globally, Salesforce possesses a vast repository of customer data. This data, when combined with generative AI solutions like AgentForce, can be mined for valuable insights and used to deliver enhanced customer outcomes. While AgentForce is still in its initial stages, it has already generated strong interest from both customers and global system integrators. Notably, Salesforce announced that approximately 5,000 customers are currently testing AgentForce, including around 3,000 paying customers. We continue to believe that Salesforce is well-positioned to monetize its AI offerings over time and expect the company to grow intrinsic value at a low double-digit rate.”

Salesforce, Inc. (NYSE:CRM) is in 16th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 162 hedge fund portfolios held Salesforce, Inc. (NYSE:CRM) at the end of the fourth quarter compared to 116 in the third quarter. While we acknowledge the potential of Salesforce, Inc. (NYSE:CRM) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

In another article, we covered Salesforce, Inc. (NYSE:CRM) and shared the list of AI stocks analysts are talking about. In its Q1 2025 investor letter, Vulcan Value Partners’ expressed confidence in the growing revenue contribution of Salesforce, Inc.’s (NYSE:CRM) Agentforce. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.