CRM: Salesforce's 36% Drawdown Meets Record Free Cash Flow
Salesforce (NYSE: CRM) has been caught in the crossfire of what Wedbush analysts call the "AI Ghost Trade" — a sweeping selloff of enterprise software stocks built on the fear that AI foundation models will disintermediate the entire SaaS layer. At $194.79, the stock trades 36% below its 52-week high of $303.07 and sits just 12% above its 52-week low of $174.57. For a company that just posted $11.2 billion in quarterly revenue and generated $14.4 billion in annual free cash flow, the disconnect between business fundamentals and market sentiment is striking. Salesforce's fiscal Q4 2026 results, reported on February 25, paint a picture of a business that isn't being disrupted — it's doing the disrupting. Revenue accelerated to 14% year-over-year growth, margins expanded, and the company's Agentforce platform is positioning CRM as the primary enterprise on-ramp for AI agents. Meanwhile, management hiked the dividend and continued aggressive share repurchases, returning $14.2 billion to shareholders in fiscal year 2026 alone. The bull case is straightforward: Salesforce remains the dominant CRM platform with 23% market share, a $41.5 billion revenue base growing at double digits, and a proven ability to layer AI functionality onto its installed base of 150,000+ enterprise customers. At 26x trailing earnings with 7.8% free cash flow yield, the stock is cheaper than it has been at any point since the pandemic bottom. The question is whether the AI threat is real or a phantom.