Investors in Salesforce have faced significant challenges in recent years, losing money over the last five. The company, a major player in customer relationship management (CRM) software, has seen its stock plummet by 31% in 2025, making it one of the worst-performing components of the Dow Jones Industrial Average. Despite a strong performance overall from the Dow, which is up 12.2% this year, Salesforce’s struggles starkly contrast the trends seen in other market indices such as the S&P 500 and the Nasdaq Composite.
Since being added to the Dow in August 2020, Salesforce has dropped 14.9%, while the index has surged by 66.5%. This ongoing decline raises questions about the sustainability of its business model, particularly as the integration of artificial intelligence (AI) influences the software landscape. Although Salesforce is positioning itself within AI through its Agentforce platform, competition remains fierce, especially from companies like Microsoft, which leverage their broader ecosystems to enhance offerings.
Salesforce’s foundations in software-as-a-service (SaaS) have also been challenged by emerging AI technologies, which enable organizations to accomplish more with fewer resources. This shift in demand dynamics could hinder revenue growth as businesses reconsider the number of licenses they need for CRM systems. Salesforce’s projected revenue growth of about 9% for fiscal 2026 reflects this slowdown, a figure that shows how market expectations have shifted.
Despite these setbacks, analysts argue that Salesforce’s stock may currently be undervalued, trading at one of its lowest price-to-sales valuations in the past decade. With a strong operating margin and an expectation for further profit margins in the coming year, Salesforce retains financial stability, underpinned by a robust balance sheet. The company’s recent initiation of a quarterly dividend, albeit modest at 0.7%, provides an additional incentive for investors.
While Salesforce’s market position faces pressure from integrated software solutions, the investment community is encouraged to view the stock through a long-term lens. Analysts suggest that even modest improvements in performance could lead to significant upside, making it a potential contrarian buy for 2026.
Nevertheless, as with any investment, there are inherent risks, especially if Salesforce fails to effectively articulate a strategy to leverage AI for substantial growth while preserving its margins. Investors are urged to weigh the potential risks against the opportunity for recovery. Given the backdrop of ongoing market volatility and Salesforce’s current valuation, it seems poised to either rebound or continue to struggle in the coming years.
In contrast, some analysts are advising potential investors to explore other opportunities, presenting a list of ten stocks they believe hold greater promise than Salesforce. These recommendations come from seasoned analysts who have historically identified stocks that later delivered considerable returns, illustrating the potential benefits of diversification in investment strategies.
