MSFT - Salesforce: I Warned About The AI FOMO - But I'm Buying Now (Upgrade)
2024-06-08 08:30:00 ET
Summary
- I warned about the extreme optimism on CRM stock in December 2023. My caution has panned out.
- Salesforce's AI monetization may take longer than expected, but the company remains confident in its long-term potential.
- Now, the market has become too pessimistic about CRM's growth potential, with a forward adjusted PEG ratio of just 1.2.
- I argue why I'm a buyer at the current levels, as the AI FOMO has dissipated.
My Caution On Salesforce Stock Panned Out
I cautioned Salesforce, Inc. ( CRM ) investors to be wary about chasing a further rally in CRM as I assessed that the optimism was getting too frothy. In my CRM stock update in December 2023 , I indicated that while CRM's valuation was still relatively attractive, the risk/reward no longer appealed to me that much. As a result, I downgraded CRM to reflect my increased caution. CRM's buying momentum initially baffled me by allowing the stock to surge toward its February 2024 highs. However, the moment of reckoning finally arrived after Salesforce's first fiscal-quarter earnings release last week. Accordingly, CRM suffered a historic selloff as Salesforce reported the "slowest quarterly sales growth in its history, with revenue expected to rise by as much as 8% to $9.25B in the period ending in July."...
Salesforce: I Warned About The AI FOMO - But I'm Buying Now (Upgrade)