Jim Cramer Highlights Salesforce’s Low Valuation After Decline

Salesforce, Inc. (NYSE:CRM) is one of the stocks that was on Jim Cramer’s radar recently. Cramer highlighted it as “formerly the king of the enterprise software stocks,” as he stated:

The problem is that most stocks in the service economy and the tech economy trade at relatively high multiples, and people simply aren’t willing to pay as much for them with these AI apocalypse fears floating around. The multiples are too high. We see it in Salesforce, reports this week. This company, formerly the king of the enterprise software stocks, which has kept pace with AI by creating its own AI agents, that’s good, has lost 33% of its value since the beginning of the year. That’s bad. It sells for less than 15 times this year’s earnings estimates, that’s good, a ridiculously low amount for a growth stock. But when Salesforce reports on Wednesday, we will see numbers that reflect the damage in its core software as a service business, where clients pay per user.

I’m worried about that. With AI making each user more efficient, the thinking is there could be a real problem here, even if it hasn’t shown up yet… Don’t forget, so far, nobody’s taken a real earnings hit from AI competition. Instead, Wall Street’s just become less willing to pay a high multiple for these earnings. And when a seller is driven by multiple compression, eventually the stocks in question will become too cheap. Maybe Salesforce will be too cheap after we see the earnings this week. I don’t know.

A laptop and a computer monitor display a detailed stock market technical analysis chart. Photo by Jakub Zerdzicki on Pexels

Salesforce, Inc. (NYSE:CRM) provides CRM-focused tools that help businesses manage customer interactions, use AI agents, analyze data, collaborate, and run marketing, commerce, and field service operations.

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