Salesforce Inc (CRM US) US$258.11

Salesforce for members that aren’t familiar with the company is a cloud-based software company that helps businesses manage customer relationships, including sales, marketing and customer service. It makes money primarily through recurring subscriptions to its software platforms, increasingly enhanced by AI and automation – a direct competitor to HubSpot (NYSE: HUBS) that MM currently uses.

The growth in revenue for CRM and its respective share price moves have been on a remarkably similar path to Xero with the exception of that last few weeks – moves which triggered the thoughts behind today’s report.

Salesforce (CRM US) has surged almost 80% in recent weeks driven first by a broader software sector recovery and then by a blowout Q2 earnings report last week that directly dispelled the AI threat narrative.

CRM surged more than +20% in a single session, its largest gain since 2020, after delivering a strong Q2 result, with revenue up 11% to US$11.35bn and FY27 adjusted EPS guidance lifted sharply to US$16.67–16.71, well above consensus of US$14.14. The expanded Anthropic partnership also helped ease fears around AI disruption. Importantly, the move has been driven largely by a valuation re-rating rather than earnings upgrades, with forward EPS estimates rising ~5% while the P/E expanded from ~14.8x to ~17.4x, having fallen as low as ~10.7x in June when AI fears were at their peak.

Specifically CRM announced an expanded partnership with Anthropic, dubbed “Claudeforce.” Agentforce, its flagship AI product, was expected to reach annual recurring revenue of around US$1.48bn, while the US$3.6bn acquisition of AI startup Fin (formerly Intercom) reinforced its commitment to the space. Strong bookings, resilient forward revenue and growing confidence that Salesforce can prosper rather than be disrupted by AI triggered its biggest one-day gain since 2020, with 30 of 31 analysts subsequently raising their price targets – nothing better than the crowd being wrong!

• CRM has demonstrated how tech stocks that demonstrate they are successfully embracing AI can re-rate higher, as fast as they fell.

The next major catalyst is Salesforce’s September 16 Analyst Day, where investors will be looking for an updated FY30 framework and further detail on its AI strategy and Anthropic partnership.

• We can see CRM adding to its recent gains as it embraces AI in the years ahead.