We came across a bullish thesis on Salesforce, Inc. (CRM) on Substack by Long-Term Pick. In this article, we will summarize the bulls’ thesis on CRM. Salesforce, Inc. (CRM)’s share was trading at $297.85 as of Feb 28th. CRM’s trailing and forward P/E were 46.83 and 26.74 respectively according to Yahoo Finance.
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Salesforce (CRM) remains a dominant force in the CRM market, driven by its expanding AI and Data Cloud capabilities. The company has reported remarkable growth, with its Data Cloud and AI annual recurring revenue reaching $900 million, a 120% increase year-over-year. Agentforce, a critical AI-driven customer service tool, has seen strong adoption, closing 5,000 deals since October, with more than 3,000 being paid. Data Cloud continues to scale, surpassing 50 trillion records, doubling year-over-year. Nearly half of the Fortune 100 companies are both AI and Data Cloud customers, and all of Salesforce’s top 10 deals in Q4 included AI and Data integration.
In Q4 2025, Salesforce delivered $10 billion in revenue, an 8% year-over-year increase (9% in constant currency), with subscription and support revenue contributing $9.5 billion. The company’s remaining performance obligation (RPO), a key indicator of future revenue, reached $63.4 billion, reflecting an 11% year-over-year growth. For the full fiscal year 2025, revenue totaled $37.9 billion, up 9% in constant currency, while non-GAAP operating margin expanded to 33.0%, highlighting operational efficiency improvements. Free cash flow surged 31% year-over-year to $12.4 billion, a record high, demonstrating Salesforce’s strong cash-generating capabilities. The company returned $9.3 billion to shareholders through share repurchases and dividends, emphasizing its commitment to shareholder value.
Looking ahead, Salesforce has provided a fiscal year 2026 revenue guidance of $40.5 billion to $40.9 billion, representing 7% to 8% year-over-year growth, with subscription and support revenue projected to rise by approximately 9% in constant currency. The company expects to further expand its operating margin, forecasting a GAAP margin of 21.6% and a non-GAAP margin of 34.0%, driven by continued cost discipline and efficiency initiatives. Operating cash flow is anticipated to grow by 10% to 11% year-over-year, reinforcing its ability to generate sustainable long-term profits.
Despite these strong fundamentals, Salesforce’s stock is trading nearly 30% below its fair price estimate of $446. This presents a compelling opportunity for investors, given the company’s robust financial performance, leadership in AI-driven customer solutions, and continued expansion of its high-margin subscription business. With its deeply integrated Customer 360 platform, Salesforce is uniquely positioned to capitalize on the digital labor revolution, offering enterprises significant productivity and efficiency gains. The company’s record-breaking cash flow and commitment to shareholder returns make it an attractive investment with considerable upside potential.
Salesforce, Inc. (CRM) is on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 162 hedge fund portfolios held CRM at the end of the fourth quarter which was 116 in the previous quarter. While we acknowledge the risk and potential of CRM as an investment, our conviction lies in the belief that some 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 more promising than CRM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.