Salesforce is on an AI buying spree, but Wall Street still has its doubts

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Salesforce is on an AI buying spree, but Wall Street still has its doubts Published Mon, Jun 29 20264:47 PM EDTNatasha Abellard Salesforce has embarked on an acquisition spree to beef up its artificial intelligence capabilities. But it hasn't convinced Wall Street to change its mind and start viewing the company as an AI winner, not a loser. The latest notch on Salesforce's M & A belt is a $3.6 billion acquisition of AI customer service platform Fin. Announced two weeks ago, Salesforce said Fin's lead product is an AI agent that helps resolve complex customer queries across various platforms and channels including email, WhatsApp, Slack, live chat, and others. Agentic systems are capable of planning and executing a series of tasks for users with little human intervention; they go beyond responding to a prompt with a written response. Salesforce said Fin will complement the company's flagship Agentforce suite, with a particular focus on small-to-medium sizes businesses looking to quickly deploy the technology. Fin's agentic system is powered by its proprietary Apex AI model. The deal is expected to close toward the end of Salesforce's fiscal year, which ends in January. Salesforce has announced or completed at least six acquisitions since December, spanning across the technology spectrum. In addition to Fin, this month Salesforce said it will buy M3ter, a usage-based billing platform, and Contentful, a provider of content management systems whose customers include Kraft Heinz and Swiss shoemaker On . Terms of both deals were not disclosed, suggesting their value is on the smaller side. The Marc Benioff-led company has also completed deals this year to bolster its tech for agentic marketing with the purchase of Qualified, and agentic e-commerce with Cimulate; prices for those buys weren't provided, either. The string of smaller transactions follows Salesforce last fall completing one of its larger acquisitions in its history, an $8 billion deal for Informatica. Buying the cloud data management company was also part of Salesforce's artificial intelligence push because data is a key input for AI systems. The buying spree, however, has done little to cast away concerns that artificial intelligence is going to disrupt Salesforce's seat-based business model and allow customers to make their own alternative applications in-house. Shares of Salesforce are down about 17% in June, on pace for its second worst monthly performance in three years; only this January was worse, when the stock fell almost 20%, as AI disruption concerns started to intensify. "I genuinely believe that Marc can transcend this," Jim Cramer said earlier this month. Jim supports Salesforce's Fin acquisition, calling it a "very good" deal to strengthen its AI portfolio. Still, he realizes the company has yet to overcome the disruption concerns for software-as-a service (Saas) players. CRM 1Y mountain Salesforce's stock performance over the past year. For a fleeting moment, it looked like the "SaaSpocalypse" narrative was subsiding. On May 27, Salesforce reported better-than-expected quarterly results . Over the next two days, the stock — along with others in the beaten-down software group — caught fire, surging almost 19% to close at its highest levels since February. Then the selling resumed. Shares declined for 14 consecutive days beginning June 2, which led to a multiyear closing low of $150.12 on June 22. The stock has climbed over 5% since then. But still, for the year, Salesforce's stock is down about 40%. D.A. Davidson analyst Gil Luria, a prominent Salesforce bear, said the company's dealmaking isn't an antidote for the ailing stock. "This isn't going to help. You can't fight narrative," Luria said in an interview. "They can argue with investors until they're blue in the face. It's not going to change investors' minds that AI is a disruption risk for software," Luria said. Others on Wall Street are more optimistic on the role that M & A can play for legacy software providers like Salesforce. In a note to clients June 15, analysts at Cantor Fitzgerald said buying Fin made strategic sense for the company. Cantor has a buy-equivalent rating and $250 price target on Salesforce. "A broader point we want to make is that if executed properly, incumbent SaaS vendors could acquire their way to the winner's table in the AI-era," Cantor analysts wrote. They said fast-moving AI native companies such as Fin have innovative products, but "lack the necessary scale, financial resources, and distribution." That's where companies like Salesforce, which have large customer bases and tons of existing data, come into play. Even before the Fin deal, Salesforce has argued it is gaining traction with AI-powered tools, most notably Agentforce. The product's annual recur