"These prices are low."

That's what Marc Benioff, Salesforce's CEO, said on the analyst call to justify a monster $50 billion share buyback. When the captain of the ship has to go public saying his own company is cheap, you've got two options: believe it's an opportunity — or suspect he's trying to prop up a sinking Titanic.

Shares dropped about 4% in Thursday's pre-market trading. And mind you, the fourth fiscal quarter numbers (ended January 31) came in above consensus.

The Numbers That Matter

Let's get to the point, no fluff:

  • Adjusted earnings per share: $3.81 vs. $3.04 expected. A massive beat.
  • Revenue: $11.20 billion vs. $11.18 billion expected. Barely above, but above.
  • Revenue growth: 12% year over year — the fastest in two years.
  • Short-term deferred revenue (cRPO): $35.1 billion vs. $34.53 billion expected.

Net income of $1.94 billion, compared to $1.71 billion in the same period last year. So far, so good.

So why did the stock drop?

The Guidance That Soured the Mood

Because the market doesn't live in the past. It lives on expectations. And the outlook for fiscal year 2027 came in like this:

  • Projected revenue: $45.8B to $46.2B (implies 10% to 11% growth)
  • LSEG consensus: $46.06B

Looks close? It is. But the market wanted more. It wanted a signal that Salesforce is riding the AI wave hard enough to accelerate, not just maintain pace. First-quarter guidance came in slightly above ($11.03B to $11.08B vs. $10.99B expected), but not enough to calm the jittery crowd.

And jittery is all this sector's got right now.

The AI Ghost That Eats Software for Breakfast

Here's the elephant in the room. In recent weeks, investors have been slaughtering software stocks over one very specific fear: what if generative AI makes a big chunk of these products obsolete?

Case in point: IBM plunged 13% in a single day — its worst daily performance since 2000 — after Anthropic published that its Claude Code can help modernize code written in COBOL. COBOL, for Christ's sake. The language that holds up half the mainframes on the planet. If AI sinks its teeth in there, imagine what it does to CRM.

Salesforce isn't sitting still. It launched an AI assistant in Slack, completed the $8 billion acquisition of Informatica (which already contributed $399 million in revenue for the quarter), and announced the purchase of Qualified, a marketing company. Annualized revenue from Agentforce — the AI platform for customer service automation — surpassed $800 million.

Benioff also raised the revenue target for fiscal year 2030: $63 billion, up from the $60 billion projected in October. Analysts were expecting $59 billion. But that target includes Informatica — meaning a good chunk of the increase is inorganic, bought, not built.

The $50B Buyback: Confidence or Desperation?

Let's put this in perspective. Salesforce is already down 28% in 2026 while the S&P 500 is up 1%. When a company announces the largest buyback in its history in that context, there are two readings:

Optimistic take (Warren Buffett would approve): the company generates insane cash flow, believes the market is mispricing it, and is putting its money where its mouth is. Skin in the game.

Skeptical take (Nassim Taleb would raise an eyebrow): a massive buyback can be a smokescreen to mask organic deceleration. When you can't convince the market with growth, you try to convince it by shrinking the denominator of earnings per share.

The truth probably lives somewhere in the middle. Salesforce is a recurring revenue machine. It's not going to die. But the narrative that it would be the big winner of the corporate AI era is being tested — hard.

Benioff even took a jab at ServiceNow, saying five of their clients migrated to Salesforce during the quarter. Big dogs fighting. But in the enterprise software market in 2026, the question is no longer who's stealing whose clients. It's whether AI is going to eat everyone's lunch.

The $50 billion buyback is Salesforce betting on itself. The 4% drop is the market saying: "Cool, but show me the growth first."

And you? Would you buy a company whose own CEO has to shout from the rooftops that it's cheap?