Salesforce: The Most Resilient Software Stock for Downturns

Key Points

• Salesforce was called out by Evercore ISI as one of the most resilient software stocks. 
• The company is in high demand and supported by macro trends that include digitization, automation, and AI.
• Analysts reset their price targets in Q1, but the market overcorrected and set itself up to rebound before year-end. 

Salesforce NYSE: CRM is among the most resilient software stocks for reductions in business spending and the market downturns they cause, at least in the eyes of analysts at Evercore ISI. They believe the company’s AI offering and breadth set it apart from competitors, and that moat is reflected in survey data.

Evercore surveyed to check the macro demand outlook for enterprise software, and although results are mixed, Salesforce is a standout, serving 95% of the industries covered. To put this into an even sharper perspective, consider that more than 90% of the Fortune 500 use Salesforce to help manage their CRM needs. 

The survey's takeaways are that the macro demand outlook for enterprise software is relatively stable despite some changes at the industry level. While some industries have been negatively affected by the 2025 economic and political developments, others have been aided, leaving the balance unchanged. Technology is one of the industries believed to have been most aided in 2025.

Critical factors imparting Salesforce’s resiliency are that businesses must engage, manage, and serve their clientele. That need cements the position of Salesforce and other CRM stocks within the macro environment—a position further reinforced by the strength of their offerings.

Data Cloud and Agentforce link the two most in-demand segments of AI, data management and automation. Data Cloud helps gather, manage, and unify data into actionable information. Agentforce helps businesses apply that information to customer service with AI automation. The pair equates to a win-win that allows enterprises to unlock the value of their data and use it efficiently to increase sales and improve margins.

Salesforce on Track to Sustain Growth for Another Decade

Salesforce’s Q4 F2025 results left the market wanting more, but despite the disappointment, they were no less strong. The company is sustaining growth at a high single-digit pace and is on track to continue at this pace for the next five to ten years.

The forecast for F2026 includes some front-end weakness offset by expected acceleration through year’s end, and the margin is expected to remain strong. Margin is a critical factor because Salesforce produces robust cash flow and free cash flow, and it has become a capital return machine. 

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Salesforce produced $12.4 billion in free cash flow in F2025 and is expected to generate growth in 2026. The company returned $9.3 billion in repurchases and dividends for a 75% payout ratio that leaves room for an increase regardless of growth. The dividend is smaller, about $1.5 billion or a 0.6% yield with shares at $265, while the buybacks are more substantial. The buybacks in 2025 are worth $7.8 billion and reduced the share count by 1.2%. 

The company has paid distributions for less than two years. Still, it has already established a record for annual increases, leading to an expectation for future yearly increases that may be substantial. The FCF has room to increase the payout, and the FCF is expected to grow. Share count reduction reduces the total distribution cost quarterly. 

Analysts' Stock Target Reset Opens Opportunity in CRM Shares

Salesforce’s Q4 results and guidance led analysts to a stock price reset sufficient to put the name on MarketBeat’s list of Most Downgraded Stocks. However, the negative activity is entirely price target reductions that left the trends otherwise unchanged. Those include a firming Moderate Buy rating with bullish bias and a forecast for a 35% upside from Apr. 1 price points. 

The price target reductions include some below the consensus, but most remain above it, and the new grouping aligns with it, suggesting the market sell-off has overcorrected. The value opportunity is also seen in the P/E multiples, which put this leading, blue-chip, capital-returning tech stock at only 15x earnings in 2030.