We came across a bullish thesis on Salesforce, Inc. (CRM) on Substack by Quality Equities. In this article, we will summarize the bulls’ thesis on CRM. Salesforce, Inc. (CRM)'s share was trading at $247.26 as of April 17^th. CRM’s trailing and forward P/E were 38.88 and 22.22 respectively according to Yahoo Finance.

A computer engineer discussing the company's Unified Cloud Software Solutions with a colleague.

The U.S. stock market has faced renewed volatility, with major indices like the S&P 500, Dow, and Nasdaq falling between 1.5% and 2.7%, while the small-cap Russell 2000 bucked the trend, gaining 1.1%. Year-to-date, however, all remain in the red, with the Nasdaq and Russell 2000 each down more than 15%. This market pressure has been amplified by geopolitical developments, including President Trump’s imposition of steep tariffs on Chinese and potentially Taiwanese goods. These actions stoked inflation concerns and heightened fears over fragile global supply chains, prompting a cautionary note from Federal Reserve Chair Jerome Powell about potential inflationary impacts. Despite these risks, the Fed has kept interest rates unchanged, a move that has drawn criticism from the White House. As a result, investor sentiment remains fragile, weighed down by a mix of inflationary pressures, trade disruptions, and monetary policy uncertainty. Yet within this volatility, discerning long-term investors often find compelling opportunities, as quality businesses can become undervalued amid broader market selloffs.

Salesforce (CRM) is one such company that appears to be caught in the downdraft of macroeconomic anxiety, yet is structurally insulated from many of the factors driving current market weakness. As a cloud-based software provider, Salesforce’s operations are not tied to physical goods or international supply chains, leaving it largely unaffected by tariffs that typically impact manufacturing and hardware companies. Its core offerings—ranging from CRM and marketing automation to AI-driven solutions—are delivered digitally through regional data centers, limiting exposure to cross-border frictions and import duties. Although indirect effects, such as a slowdown in enterprise software spending, are possible if economic uncertainty spreads, Salesforce’s subscription-based model and sticky customer base offer resilience in uncertain times.

Despite this structural strength, the market appears to be undervaluing Salesforce’s long-term growth. Reverse DCF analyses show that the market is pricing in just a 9.06% compound annual growth in free cash flow over the next five years and only 6.44% over ten years—growth assumptions that significantly understate the company’s trajectory. With improving margins, a robust pipeline of innovations like Agentforce, and expanding operating leverage, Salesforce is more likely to grow free cash flow per share in the mid-to-upper teens or even low 20s over the coming years. Its current trailing free cash flow yield of 5.23% also stands out as attractive when compared to the 4.34% yield on the 10-Year Treasury. Taken together, these factors make Salesforce a strong long-term investment opportunity—a high-margin, AI-enabled platform with meaningful upside potential and a clear disconnect between price and intrinsic value.

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.