Salesforce (CRM): A Strategic Bet on AI-Driven Growth in Ken Fisher's Tech Portfolio

Ken Fisher, the legendary investor behind Fisher Asset Management, has long been a contrarian voice in tech investing, emphasizing growth stocks during bull markets while tempering enthusiasm with pragmatic risk assessment. His recent Q4 2024 portfolio reveals Salesforce, Inc. (NYSE:CRM) as a top 10 holding, valued at $4.16 billion, positioning it as a key beneficiary of his thesis that established tech leaders with AI integration will outperform in the long run, even as short-term volatility persists.

The Case for Salesforce: A Hybrid of Scale and Innovation

Salesforce’s inclusion in Fisher’s portfolio isn’t merely a bet on its dominance in enterprise software—it’s a calculated wager on its ability to transform through AI. The company’s fiscal 2025 results underscore this strategy:
- Revenue hit $37.9 billion, a 9% YoY increase, driven by robust demand for its CRM platforms and $900 million in annual AI revenue (up 120% YoY), reflecting rapid adoption of tools like Agentforce 2dx, its AI-driven automation platform.
- Operating cash flow surged 28% to $13.1 billion, signaling strong financial health amid a sector-wide shift toward cost discipline.

Fisher’s team highlights Salesforce’s $4.16 billion stake as a testament to its dual strengths: a $150 billion addressable market in enterprise software and a first-mover advantage in embedding AI into core workflows. The firm’s Agentforce 2dx, for instance, now enables proactive, autonomous AI agents to manage customer interactions and internal processes—a leap beyond chatbots that competitors like Microsoft (MSFT) and Oracle (ORCL) are still refining.

Institutional Sentiment and Market Challenges

While Salesforce’s stock has dipped 18% year-to-date in 2025—due to cautious fiscal 2026 guidance and slower-than-expected cloud adoption—the data suggests patient investors are doubling down:
- 162 hedge funds held CRM shares as of Q4 2024, up from 116 in Q3, with Fisher’s firm alone accounting for nearly 20% of its stake.
- Analysts project 5-7% revenue growth through 2027, modest compared to its earlier double-digit streak, but this reflects a maturing market where Salesforce’s scale and customer retention (93% churn rate) act as stabilizers.

Fisher’s Nuanced View: AI as Both Catalyst and Competitor

Fisher’s bullish stance isn’t without caveats. While he applauds Salesforce’s AI strides, he also acknowledges the emerging threat of pure-play AI companies trading at sub-5x earnings multiples, which his firm views as higher-growth alternatives. This duality shapes his strategy:
- CRM is a core holding for its $37 billion revenue base and AI-enabled diversification, but Fisher’s portfolio leans further into smaller AI innovators for short-term upside.
- The firm’s $12.75 billion valuation post-Advent Investment in early 2025 underscores its confidence in navigating macro risks like trade tariffs—a topic Fisher has called a “market overreaction” rather than a systemic threat.

Risks and Mitigants

• Valuation concerns: CRM’s forward P/E of 24x trails peers like Adobe (ADBE) but aligns with its growth trajectory.
• AI execution: Salesforce must ensure Agentforce’s scalability, as rivals like SAP (SAP) and Workday (WDAY) refine their own AI tools.
• Economic headwinds: Salesforce’s enterprise clients may delay upgrades during recessions, though its subscription model provides recurring revenue resilience.

Conclusion: A Stock for the Long Game

Salesforce’s inclusion in Fisher’s top 10 reflects its status as a bridge between legacy tech leadership and next-gen AI innovation. With $900 million in AI revenue already materializing and $13.1 billion in cash flow, the company is well-positioned to weather near-term growth slowdowns. While Fisher’s emphasis on AI disruptors underscores CRM’s limitations as a “pure play,” its $37.9 billion revenue engine and 93% customer retention offer stability in volatile markets.

For investors, CRM’s 18% year-to-date decline creates an entry point into a sector leader with 120% AI revenue growth and institutional backing from a $299 billion asset manager. As Fisher’s track record shows—373% returns since 2014 by tracking top funds—CRM’s blend of scale and innovation makes it a compelling holding for those willing to endure short-term turbulence for long-term AI-driven returns.