Investment Opportunities Amid Software Stock Slump
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2 days ago
0mins
Should l Buy CRM?
Source: Fool
- Current Software Market: Despite the Dow Jones Industrial Average surpassing 50,000 and the S&P 500 gaining at least 16% in six of the last seven years, the iShares Expanded Tech-Software Sector ETF is nearly 28% below its all-time high, indicating that software stocks are in a bear market, presenting opportunities for value investors.
- Salesforce Growth Potential: Salesforce's Agentforce AI platform generated over $500 million in annual recurring revenue in Q3, up 330% year-over-year, and despite AI competition concerns, its leadership in the CRM market and strategic acquisition capabilities sustain high growth, with a forward P/E ratio of just 14.8, representing a 52% discount to its historical average.
- Adobe's Performance Recovery: Adobe's Digital Media segment achieved $19.2 billion in annual recurring revenue for FY 2025, an 11.5% increase, and despite fears surrounding generative AI, its strong cash flow and share buyback program (30.8 million shares in FY 2025) indicate financial health, with a forward P/E of 10.1, 61% below its historical average.
- Okta's Rising Security Demand: Okta's RPO increased 17% year-over-year to nearly $4.3 billion in Q3, as the shift of enterprise data to the cloud boosts cybersecurity demand; its AI-driven platform provides identity authentication and application authorization, and while facing AI competition, its forward P/E of 24 shows relative attractiveness.
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Analyst Views on CRM
Wall Street analysts forecast CRM stock price to rise
42 Analyst Rating
31 Buy
10 Hold
1 Sell
Moderate Buy
Current: 185.430
Low
223.00
Averages
326.95
High
405.00
Current: 185.430
Low
223.00
Averages
326.95
High
405.00
About CRM
Salesforce, Inc. is a provider of customer relationship management (CRM) technology. The Company helps organizations of any size reimagine their business for the world of artificial intelligence (AI). With Agentforce, its platform, organizations can bring humans together with AI agents to drive customer success on one deeply unified platform. With the Salesforce platform, it delivers a single source of truth, connecting customer data with integrated AI across systems, apps and devices to help companies sell, service, market and conduct commerce from anywhere. Agentforce is a new layer of the Salesforce platform that enables companies to build and deploy AI agents that can respond to inputs, make decisions and take action autonomously across business functions. Agentforce includes a suite of customizable agents for use across sales, service, marketing and commerce. Datablazer is a data-driven innovator, which leverages the Company’s platform to unlock insights and drive decisions.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Corporate Earnings in Spotlight: Walmart (WMT) is set to release its fourth-quarter earnings on Thursday, marking the first report under new CEO John Furner, making it a key indicator of consumer spending that the market is eagerly anticipating.
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See More
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- Competitive Pressure from Gemini 3: Google's Gemini 3 LLM update launched in November significantly enhanced its AI capabilities, attracting a surge of paid subscribers, leading investors to worry that Claude Cowork might further poach these users, increasing market uncertainty.
- Investor Buying Opportunity: Despite market volatility, renowned investors like Warren Buffett and Cathie Wood actively increased their stakes in Alphabet during the stock's decline, investing $21.6 million and $15 million respectively, indicating confidence in Alphabet's long-term value and potentially providing a buying opportunity for other investors.
See More
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- Investor Activity: Notable investor Cathie Wood took advantage of the dip by purchasing $21.6 million in Alphabet shares through her Ark Invest funds on February 5, indicating confidence in the company's future potential despite current market challenges.
- Industry Impact: The rollout of Claude Cowork negatively affected several business software companies, with Salesforce, Intuit, and Atlassian experiencing stock declines of 27.9%, 33%, and 41.6%, respectively, reflecting market fears that AI tools could replace traditional SaaS platforms.
- Competitive Pressure: Despite Google's advancements with Gemini 3 in the AI space, investors remain concerned that Claude Cowork could lure away paid subscribers from Gemini, potentially undermining Google's competitive position in the AI market.
See More
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