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- š Salesforce's Pain, Investors' Gain
š Salesforce's Pain, Investors' Gain
The cloud giant's 23% tumble may have served up precisely the contrarian feast that patient capital craves
Evelio Silvera
September 04, 2025
Good Morningā¦
When Wall Street's darling becomes its pariah in just 12 months, smart investors start sharpening their pencilsāand Salesforce's decade-low valuation metrics suggest the math is getting very interesting indeed.
š Market Trends ā Nasdaq, S&P 500 end higher, boosted by Alphabet, Apple; Dow dips
š„ļø Market Movers from Fintech.tv ā [WATCH] Navigating the future of finance: Diogo Monica on stablecoins and venture capital
And nowā¦
ā±ļø Your 5-minute briefing for Thursday, September 4, 2025:
MARKET BRIEF
Before the Open
As of market close 09/03/2025.
Pre-Market
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Fear & Greed
Markets in Review
Alphabet clears the antitrust overhang ā and tech drags stocks higher
S&P 500 +0.51% (6,448) and Nasdaq +1.03% (21,498) rose on megacap momentum; the Dow ā0.05% (45,271) lagged as cyclicals faded.
The Big Picture:
A federal courtās remedy in Alphabet (GOOGL) antitrust case avoided a breakup and let Chrome liveāno exclusive search deals, some data-sharing. Translation: regulatory clouds thinned without killing the cash machine. Investors refocused on fundamentals and valuation.
Macro kept a lid on euphoria. Job openings fell to 7.18M, a rare low since the pandemic, sharpening attention on Fridayās payrolls. Yields eased off intraday highs (10-year ~4.23%, 30-year ~4.91%), helping duration-sensitive tech.
Commodities were a sideshow: oil held in a tight band, limiting the risk of a fresh energy-inflation flare just as the Fed eyes cuts.
Market Movers:
Alphabet (GOOGL) +9% ā āworst caseā dodged; AI-driven search and YouTube/Cloud optionality back in focus. Apple (AAPL) +3.8% benefits from keeping Google Search preloadedāhigh-margin traffic checks in.
Energy & banks ā softer curve and growth jitters weighed; higher long rates earlier in the week still a headwind for NIM and capex-levered names.
Ongoing rotation into quality tech and small caps as Fed-cut odds rise; trade-policy noise keeps exporters and tariff-exposed staples choppy.
What Theyāre Saying:
āThis was clearly a clearing event for GOOGLā¦ now you can focus on fundamentals, and valuation is highly attractive,ā said Mark Mahaney (Evercore ISI).
WHAT WEāRE WATCHING
Events
Today: Automatic Data Processing, Inc. - Automatic Data Processing, Inc. (ADP) Non-Farm Employment Change - 8:15am
Why You Should Care: Job creation is an important leading indicator of consumer spending, which accounts for a majority of overall economic activity;
Today: Department of Labor - Unemployment Claims - 8:30am
Why You Should Care: Although it's generally viewed as a lagging indicator, the number of unemployed people is an important signal of overall economic health because consumer spending is highly correlated with labor-market conditions. Unemployment is also a major consideration for those steering the country's monetary policy;
Today: Institute for Supply Management - ISM Services Purchasing Managers' Index (PMI) - 10:00am
Why You Should Care: It's a leading indicator of economic health - businesses react quickly to market conditions, and their purchasing managers hold perhaps the most current and relevant insight into the company's view of the economy;
Earnings Reports
Today: Lululemon, National Beverage Corp. (LaCroix), Toro, DocuSign, Broadcom
Tomorrow: ABM Industries Incorporated
MARKET INSIGHTS
Leading News
Salesforce's Growing Pains Signal a Buying Opportunity
Photo Credit: Yucel Moran
Why it matters:
The cloud giant's earnings beat masks deeper AI transition challenges, but smart money is circling this beaten-down tech stalwart trading at 10-year valuation lows.
Zoom Out:
Salesforce (CRM) delivered another quarter of mixed signals Wednesday, beating earnings expectations with $2.91 per share versus the $2.78 consensus while revenue climbed 10% to $10.24 billion. Yet investors fled after management issued lukewarm guidance for Q3.
The market's harsh judgment reflects a simple truth: revenue growth stuck in single digits since mid-2024 has spooked Wall Street. Down 23% year-to-date, CRM trails every major tech peer and sits at the bottom of the Dow 30.
But here's the contrarian opportunity: When enterprise value-to-free cash flow ratios hit decade-long lows, the crowd's pessimism often creates value for patient investors willing to look beyond quarterly noise.
Key Insights:
AI disruption fears overdone: While competitors threaten traditional CRM, Salesforce's Agentforce platform positions the company as an AI solutions provider, not victim. The $8 billion Informatica (INFA) acquisition bolsters data capabilities.
Cash flow fortress remains intact: Despite growth concerns, Salesforce maintains robust free cash flow generation and just raised full-year EPS guidance to $11.33-$11.37 from prior ranges.
Valuation reset creates entry point: At current levels, the market prices in permanent deceleration while ignoring Salesforce's 41-million-user ecosystem and enterprise software switching costs.
Market Pulse:
"We are at the end of an era of SaaS as we know it" ā Futurum's Daniel Newman
Bullās Take:
Salesforce's AI transition pain creates a classic value opportunity for investors who understand that temporary disruption often precedes long-term dominance. Smart money accumulates when the crowd capitulates.
Market Stories of Note
American Eagle's Celebrity Gamble Pays Off:
The teen retailer's risky bet on Sydney Sweeney and Travis Kelce appears to have cracked the code on viral marketing, driving 45 cents per share earnings versus the 21 cents Wall Street expected while adding 700,000 new customers. Despite initial controversy over the campaign's messaging, the marketing blitz generated mid-single digit comparable sales growth and sold out inventory faster than any previous collaboration in company history. For investors willing to stomach the volatility of celebrity-driven retail plays, American Eagle's 20% after-hours surge suggests that authentic brand partnershipsāeven polarizing onesācan still move the needle in an oversaturated market.
Figma's Reality Check Arrives:
The design software darling's first public earnings report delivered a harsh lesson in post-IPO gravity, as shares tumbled 13% despite revenue climbing 41% to $249.6 millionāproving that even beating estimates can't always satisfy growth-hungry investors drunk on IPO euphoria. The company's net retention rate slipped from 132% to 129%, a modest decline that reveals how quickly Wall Street pivots from celebration to skepticism when perfection becomes the baseline expectation. Smart investors eyeing Figma's transition from an $827.9 million loss last year to $846,000 in net income should recognize that this volatility creates the exact kind of opportunity that separates patient capital from panicked moneyāespecially with 35% of insider shares locked up until August 2026.
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