Investment management company Vulcan Value Partners recently released its first-quarter 2026 investor letter. A copy of the letter can be downloaded here. The firm focuses on improving long-term returns and lowering risk over short-term results. In the quarter, the Large Cap Composite (Net) returned -14.1%, the Small Cap Composite (Net) returned -6.8%, the Focus Composite (Net) returned -19.1%, the Focus Plus Composite (Net) returned -19.1% as well as the All-Cap Composite (Net) returned -13.5%. Throughout 2025 and escalating to the first quarter of 2026, the market is experiencing heightened volatility related to AI’s potential, leading to mispricing of some strong companies. The current market turbulence presents opportunities for long-term investors willing to accept short-term volatility in stable-valued companies and improve the margin of safety. The letter identified businesses into three groups with perceived /real AI disruption risk: Software, Alternative Asset Managers, and indirectly impacted businesses. The firm highlights that its investment strategy aims to leverage this volatility to reduce risk and increase returns in the long term. In addition, please check the Firm’s top five holdings to know its best picks in 2026.
In its first-quarter 2026 investor letter, Vulcan Value Partners mentioned Salesforce, Inc. (NYSE:CRM) as a material detractor from performance. Salesforce, Inc. (NYSE:CRM) is a cloud computing company that offers Customer Relationship Management (CRM) technology that brings companies and customers together. On April 21, 2026, Salesforce, Inc. (NYSE:CRM) closed at $187.11 per share. One-month return of Salesforce, Inc. (NYSE:CRM) was 2.83%, and its shares lost 25.30% over the past 52 weeks. Salesforce, Inc. (NYSE:CRM) has a market capitalization of $172.70 billion.
Vulcan Value Partners stated the following regarding Salesforce, Inc. (NYSE:CRM) in its Q1 2026 investor letter:
“Salesforce, Inc. (NYSE:CRM) is the world’s leading SaaS vendor for customer relationship management (CRM) and salesforce automation (SFA) software, including AI agents. Salesforce’s stock price has been negatively impacted by AI disruption fears. Salesforce largely has a seat-based subscription model. Bears fear that AI agents will replace human beings and that Salesforce’s seat count will decline. We believe that AI will enhance incumbent platforms such as Salesforce, which are also in the best position to keep software updated and maintained in the future. We also believe that Salesforce will be a net beneficiary if seats do decline as clients adopt its agentic AI solution, Agentforce. For example, on average Salesforce charges approximately $2,000 per seat for its product suite. A typical user might make $40,000 per year. Salesforce is able to charge approximately 10-20% of the cost of a human for Agentforce. If that human user is replaced by Salesforce’s AI agent, Salesforce’s revenue will increase 2x to 4x to approximately $4,000 to $8,000.”
Salesforce, Inc. (NYSE:CRM) ranks 28 on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 115 hedge fund portfolios held Salesforce, Inc. (NYSE:CRM) at the end of the fourth quarter, compared to 119 in the previous quarter. While we acknowledge the risk and potential of Salesforce, Inc. (NYSE: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 time frame. If you are looking for an AI stock that is more promising than Salesforce, Inc. (NYSE:CRM) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Salesforce, Inc. (NYSE:CRM) and shared the list of most undervalued Dow stocks to buy. In addition, please check out our hedge fund investor letters Q1 2026 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
