The Growth Nobody Sees Coming 👀

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THE GROWTH NOBODY SEES COMING 👀

Is Wall Street asleep at the wheel? Because everyone’s missing growth in plain sight.

I’m talking about $CRM ( ▲ 0.62% ) . So why Salesforce?

It’s all about the company’s next growth phase powered by Agentforce, its AI copilots. And it’s just getting started.

Sure, revenue growth has cooled off. But beneath the surface, Salesforce is becoming a leaner, more profitable, and more shareholder-friendly machine. The AI tailwind is about to flip from “internal experiment” to “market tsunami.”

The Setup: From CRM to AI Powerhouse

Salesforce used to be a classic “growth-at-any-cost” story. Then Marc Benioff slammed on the brakes and rewired the business for efficiency.

Here’s what the numbers look like today:

• Revenue: $10.2B last quarter, up 10% YoY — slightly above guidance.

• Profit: $1.96 GAAP EPS (vs. $1.80–1.82 guided), and $2.91 non-GAAP EPS (vs. $2.76–2.78 guided).

• Margins: GAAP operating margin jumped 370 bps YoY and 300 bps QoQ.

• Shareholder returns: $2.6B handed back through dividends and buybacks.

• Balance sheet: $15.3B in cash + $5B in strategic investments – $8.4B debt = a net cash position.

The company that once loved splashy M&A now prefers dividends, buybacks, and only then acquisitions. (They’ve got a deal pending for Informatica, but even that keeps leverage neutral.)

Enter: Agentforce — Salesforce’s AI Army

Here’s the secret sauce everyone’s missing.

Agentforce is Salesforce’s internal AI platform that’s already rewriting the company’s own playbook.

• They used it to replace 4,000 customer support roles, redirecting those employees to sales.

• Within Salesforce, 1.5M conversations have already happened with these AI agents — and another 1.5M with humans.

• In Benioff’s words: “Every prospect is finally getting a call back.”

If you’re wondering when growth reaccelerates… it’s when customers start using the same tools Salesforce is using to sell you.

That’s why I’m calling Agentforce the catalyst for the next phase of top-line growth.

What the Street’s Missing

The market’s yawning because growth hasn’t yet inflected. But the signs are right there:

• Tableau and MuleSoft — two core data products — have both seen accelerating growth the last two quarters.

• The sales pipeline is growing in the high teens, and “big deals” are up nearly 20%.

• Management guided for up to 9% YoY revenue growth next quarter — conservative, IMO.

Salesforce is basically a coiled spring. Once Agentforce adoption takes off externally, that growth curve’s going vertical.

The Valuation Case

Right now, $CRM ( ▲ 0.62% ) trades at ~22x non-GAAP earnings.
But here’s why that’s deceiving:

• Stock-based comp is stable YoY.

• GAAP margins are catching up fast to non-GAAP.

• Long-term, Salesforce can realistically hit 40% net margins.

That puts it at ~15x long-term earnings. For a company with a fortress balance sheet, subscription revenue, and a sticky customer base, that’s too cheap.

Wall street see an average upside of nearly 40% in the next 12 months and honestly, I think that might even be underestimating it.

My math:

• Long-term valuation could rise to 7–10x sales, or about 17.5x–25x earnings.

• That’s in Microsoft territory — and deservedly so, given Salesforce’s platform depth.

The Risks (Because We’re Adults Here)

• Macro risk: Any market downturn hits software stocks hard.

• AI risk: If generative AI replaces jobs faster than companies can sell software, seat-based licenses could take a hit.

• M&A risk: Salesforce’s past acquisition spree was... let’s call it “price-insensitive.” Management says buybacks are priority #1 now, but keep an eye out.

The Bottom Line

Salesforce hasn’t reaccelerated… yet.

But internally, Agentforce is driving insane efficiency gains. Once customers get their hands on it, the same magic that saved Salesforce billions could add billions to revenue.

A high-margin, cash-rich, AI-enabled enterprise software leader trading below fair value? That’s my kind of asymmetry.

TL;DR

• Salesforce (CRM) is entering the Agentforce era — an AI revolution hiding in plain sight.

• 10% revenue growth, massive margin expansion, and $2.6B in shareholder returns prove it’s no longer “growth at any cost.”

• Agentforce has already replaced 4,000 internal support roles — external adoption could ignite revenue acceleration.

• At ~15x long-term earnings, CRM looks undervalued next to peers like Microsoft.

• Risks: market downturns, bad M&A, or AI disruption.

• But with a net cash balance sheet, a growing pipeline, and rising profitability — this looks like the calm before the breakout.