MidCurveCapital
Equity Investor, Biotech & Software Focus
Salesforce's software platforms look set to domesticate AI rather than be displaced by it: the new Claude product is a Slack bot, which @tekbog calls the biggest endorsement for Salesforce. Andrej Karpathy says it is deeply integrated, writes most of the code and is a different way of working; he now works from Slack. @johnkmason adds that Salesforce has $20B left on its buyback and trades at financial-crisis EV/EBITDA levels, about 10x free cash flow even excluding stock compensation. x.com x.com x.comÂ
Salesforce's poor M&A is literally half the reason its multiple stays low. Slack and Informatica are cited as examples, with Braze raised as a question; AI making Tableau obsolete in a few years would be a separate risk, not itself poor M&A. x.comÂ
Salesforce's sum-of-the-parts case looks secured by Slack alone. Per the quoted post, Salesforce's market cap is about $130 billion, and Slack could probably raise at a $130 billion valuation as a private company as the neutral interface and context layer for AI agents and LLMs. x.comÂ
Salesforce looks reduced to a backend provider for Claude's Slack bot, undercutting claims that it is an obvious AI winner and undervalued in a SaaS recovery, a risk flagged as early as January. x.comÂ
Salesforce's Slack, once one of the worst-looking acquisitions, now looks juicy as AI agents move into it. Anthropic introduced Claude Tag, which brings Claude into Slack as a team member with access to chosen channels and tools so teams can delegate tasks to it. x.comÂ
Bloomberg Intelligence sees fragmented enterprise-software markets as runway for large vendors to buy share, enter adjacent areas and strengthen AI, data and platforms. Serious software M&A is expected: Guidewire's $1.7B purchase of hyperexponential adds another deal after Salesforce's acquisition of Braze, which opened the gates. x.com x.comÂ
Salesforce is fully priced, even a little more than worth paying, for roughly 12% annual growth: trailing revenue of $43B is expected to reach $63B by 2030. A lower price would be needed for a long-term position, and it is not a buy-and-forget stock. x.com x.comÂ
Software stocks probably have a floor as results challenge fears that AI agents will displace them. Since the June 22 momentum unwind, IGV is up 25% and the SOX index down 22%. Atlassian and Salesforce jumped on solid results, plus an Anthropic deal for Salesforce, and possible Silver Lake interest lifted Workday. A new bullish twist says agents will use software tools 10-100x more than humans. Whether fundamentals back the rally is still open; a likely Fed hike and weak September are risks. … Show more
Salesforce's usage-based AI billing can expand revenue beyond traditional software seats. Agentforce ARR has surpassed $1.5 billion, with year-over-year growth more than doubling, while Data 360 supplies customer data for its agents. At about 14-15x forward earnings and a 7.8-8.2% trailing free-cash-flow yield versus the S&P 500 median of 4.5%, Salesforce is a top candidate for returning institutional capital seeking both defense and growth. x.comÂ
Salesforce is exposed to AI-native rivals aiming to own the sale itself rather than build a better CRM. Upstarts such as Attio, Monaco and Rox can capture the decision traces behind closed deals, a learning loop Claude cannot rebuild from Salesforce's fields. Its schema is more tax than foundation: relationship-driven work like recruiting and VC does not fit it, and young startups cannot be served profitably. Its 150k customers won't churn soon, but new AI-native firms may never install it. … Show more
Salesforce's strong free cash flow and healthy balance sheet support its setup as enterprise AI adoption, Agentforce and AI-driven workflow automation advance. Its earnings gap on four times average volume has been followed by a tightening formation. x.com x.comÂ