Salesforce CEO Marc Benioff gives investors this reminder ahead of his big day

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I think I’ve fully processed my time at the annual Salesforce (CRM) extravaganza in San Francisco known as Dreamforce.

This was my fourth Dreamforce, and it was mesmerizing, as usual—including dinner atop the 61-story Salesforce tower with Matthew McConaughey (a longtime friend and pitchman for the SaaS giant), Will.i .Am, Metallica’s drummer. Lars Ulrich, one of Nvidia’s (NVDA) founding GPU creators, and Anthropic co-founder Daniela Amodei (who made some great short remarks about artificial intelligence).

This dinner ended with an acoustic performance by Alanis Morissette, who sang four songs that reminded me that at some point in the last 42 years, I had a personal life (full of teenage pain that fed me just the appetite for Alanis’s cheesy tunes). on Myspace).

I digress.

Now that I’ve digested this latest West Coast tech development, I’m here to say it’s good to see Salesforce co-founder and CEO Marc Benioff back to being Marc Benioff.

I realize that as a journalist I should be critical, and I am. Salesforce shocked the heck out of the market at the end of May with a weak outlook, and the stock got hammered. It’s not a great look.

But I can’t completely turn off the DNA of the analyst in me that still exists deep down.

And on that note, I liked what I saw from Benioff at Dreamforce from a few different perspectives.

I saw a founder engage thousands of employees in his vision of the future of AI during a conference. The room full of “pioneers” — as Salesforce employees are called — hung on his every word. The group was ready to go through a wall for Benioff, essential when you’re trying to deploy a billion autonomous AI agents and deliver for Wall Street every quarter.

It was also significant that Benioff mostly did the presentation himself, only passing the mic a few times.

“The reason is that I think he feels this is a pivotal moment for his company, for the industry and for technology,” Goldman Sachs analyst Kash Rangan, who was also in attendance, told me.

“When these entrepreneurs like Marc and Larry Ellison from Oracle, who founded their companies and have this deep sense of connection with companies, and they understand those critical moments, it’s like they go into high gear and all they can think about is to get the company on the right side of technology.”

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I saw a founder deeply involved in the products he pitched to the masses – not reading the talking points provided by team members. Benioff even went as far as to quiz me on the Opening Bid podcast about what I learned from a product demo at the event. You can watch this exchange in the video above.

If he thought he was going to catch this guy flat-footed, hell no! Forever ready!

I saw a founder do what very few in corporate America could do: bring together big names to lead meaningful discussions, which often turned to discussions of Salesforce innovations and their longstanding personal ties to Benioff.

Benioff has one of the most extensive networks I’ve seen, and believe me, that has paid Salesforce dividends in terms of reputation, business wins, and getting things done quickly.

“Marc can turn this ship around like no one else when he gets an idea in his head,” a Benioff confidant told me at the Salesforce Tower dinner.

By all indications, Benioff is back to aggressively steering that massive Salesforce ship — shaking off the activist attacks that took place not long ago.

“If I don’t enjoy it — I don’t, and I think I really enjoy Salesforce. I like it. I feel that I have done fundamental work, especially in the last 18 months. We’ve gotten the company to a point where it’s an absolute leader, where everybody has to answer,” Benioff remarked when asked to reflect ahead of his 60th anniversary on Sept. 25.

So all of this begs the question: Why isn’t there more optimism in Salesforce stock?

Its shares trade on a forward price-to-earnings multiple of 25 times, according to Yahoo Finance data. Microsoft (MSFT) trades at 33 times, while Oracle (ORCL) (Ellison is a mentor to Benioff, dating back to his time at the company) is at 27. Salesforce quasi-rival ServiceNow ( NOW ) trades on a forward multiple of 53 times.

Professionals tell me the Street is generally concerned about Salesforce’s tendency to spend big on acquisitions, which have weighed on margins and free cash flow in the past. Others are still not sold on Salesforce monetizing its new AI initiatives.

But all generally agree that the stock looks cheap on a relative and historical basis.

“I’d go so far as to say there’s not a lot of optimism (at all) going into Salesforce stock right now,” Rangan said. “The stock is pricing as if there is no growth at all, which is absolutely ridiculous. So not only is AI optimism not rated, there is no optimism at all.

Salesforce guidance calls for sales growth of 7% this year and operating cash flow growth of up to 25%, FYI.

“I’m very bullish on this company,” Rangan said. “People tend to dismiss Marc, but I’m a big bull in the company.”

Three times a week, I host insightful conversations with the biggest names in business and markets around Opening offer. Find more episodes on our website video hub. Take care of yourself your favorite streaming service. Or listen and subscribe to Apple Podcasts, Spotifyor wherever you find your favorite podcasts.

In the Opening Bid episode below, BNY ( BNY ) CEO Robin Vince wraps up his plan to grow the iconic US bank.

Brian Sozzi is the executive editor of Yahoo Finance. Follow Sozzi on X @BrianSozzi and further LinkedIn. Advice on deals, mergers, activist situations or anything else? Email [email protected].

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