Stocks to buy

This Activist Investor Just Bought a Chunk of Salesforce Stock. You Should, Too.

Right now, customer relations management software specialist Salesforce (NYSE:CRM) isn’t in favor among investors. Yet, one activist investor is buying while others are selling. His contrarian strategy could provide a huge payoff down the road, and you can also grab some Salesforce stock shares for potential profits.

As we’ll discuss in a moment, Salesforce expects to grow its sales and is embracing artificial intelligence technology. However, sometimes the market is hard to please.

That’s fine, as the panic-sellers simply don’t recognize Salesforce’s excellent comeback prospects in 2024.

Who Just Bought $100M of Salesforce Stock?

Mason Morfit is an activist investor and a Salesforce board member. Clearly, he still believes in the company as he recently purchased 428,000 Salesforce shares, valued at approximately $100 million.

With that, Morfit holds roughly 3.9 million shares of Salesforce stock, collectively worth around $922 million. Now, that’s what I would call strong conviction in the company!

I’m not privy to the inside scoop on why Morfit added to his Salesforce share stake. However, I’ll tell you one thing that I like about Salesforce now, and that Morfit might also like.

Specifically, Salesforce now bills itself as the number-one “AI CRM,” with “CRM” standing for customer relations management software.

In other words, Salesforce is going all in on the AI trend. In fact, the company is opening an AI innovation center in London. This AI center “will be the first of many globally,” according to Salesforce (via GlobalData).

Salesforce’s Sales Growth Disappoints Investors

Sometimes, I think that investors are too spoiled nowadays. They tend to expect double-digit-percentage sales growth in every quarter, which isn’t always realistic.

Here’s a perfect example. In the first quarter of fiscal 2025, Salesforce’s revenue grew 11% year over year to $9.13 billion. For the current quarter, Salesforce expects to generate revenue of $9.2 billion to $9.25 billion, up 7% to 8% YOY.

Investors did not like Salesforce’s sales guidance. Apparently, single-digit-percentage revenue growth isn’t good enough anymore. Personally, I think it’s fine as 7% to 8% sales growth is sustainable.

Nevertheless, Salesforce stock tumbled 15% immediately after the company released its results and guidance.

Raymond James analyst Brian Peterson called this selloff “overdone,” while CFRA Research analyst Angelo Zino said it was “a little bit of an overreaction.”

I concur with both analysts and commend them for seeing the situation clearly. I appreciate Peterson’s audacity in reiterating his “strong buy” rating on Salesforce shares amid the selloff.

Salesforce Stock: Capitalize on the Overreaction

You don’t have to buy $100 million worth of Salesforce shares like Morfit did. Feel free to capitalize on this opportunity with your own right-sized share position in Salesforce.

Salesforce is ballooning its AI-market presence, and the company’s sales growth should be fine even if it’s not always in the double digits.

Therefore, even if your share position won’t be as big as Morfit’s, today’s still a great day to buy some Salesforce stock.

On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

David Moadel has provided compelling content – and crossed the occasional line – on behalf of Motley Fool, Crush the Street, Market Realist, TalkMarkets, TipRanks, Benzinga, and (of course) He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.

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