Salesforce (CRM) shares dipped on Thursday after the company missed revenue estimates and reported a weak outlook. Wedbush Managing Director Dan Ives joins Market Domination to discuss his perspective on the company’s future trajectory.
Ives notes that the current pressure on Salesforce represents “a bump in the road,” characterizing its guidance as conservative to “clear the deck” for the next quarter. He emphasizes that Salesforce remains “a gold-standard tech play” and now is an ideal opportunity for investors to acquire the stock.
“This is a situation where they have it all in front of them, and I just view this as a speed bump, not the start of a structural decline,” Ives tells Yahoo Finance, expressing confidence in the company’s long-term prospects.
For more expert insight and the latest market action, click here to watch this full episode of Market Domination.
This post was written by Angel Smith
Video Transcript
As you note, shares of sales force are sinking today after the software company said sales growth will stall to its slowest in its history.
So, is this a long term concern for investors or this just a bump in the road?
Well, joining us now for an outlook on sales force is Dan Ives Wedbush, managing director and Senior Equity and Dan, great to have you on the show on set.
Let’s dig right in.
I thought it was interesting, Dan, when you look at the stock on the C call, just some of the language on that call from executives where they were sounding this note of caution, Dan, I mean, they talked about measured buying behavior.
That was their words, not what you love to hear when you’re an investor.
What do you make of the tone?
What do you make of the report and the reaction Benioff calls like it is, but they’re in between two growth waves because the A I driven growth, what I view as the renaissance of growth for CRM that’s still 9, 12 months away.
So what’s happening is you’re seeing some disruption, larger deals but but in my opinion, it’s a bump in the road because you’ll see the overreaction like you’re seeing on the sell off.
Remember, we saw the same thing with Pau Alto down 30 you know, percent.
Look what’s happened in that recovery, I believe is conservative bar.
They basically cleared the deck for next quarter.
And if you looked up sandbags gardens, you’d see this quarter coming up.
So there’s a bump and then there’s sort of a plateau, right?
I mean, you know, nine months is a long time, potentially for investors to be patient when they’re looking at a payoff that isn’t coming until next year, maybe even the year after.
And it seems like today, there’s not a lot of patience baked in no patience.
We then because you have the haves and the have nots.
You got the godfather of A I Jensen and Vinny in the left lane.
Do you bet on that and just pay up or any sort of sniff of any negative news, work, day sales for, you know, we’ve seen across the board, you’re gonna see this happen.
But in my opinion, you’re talking about a gold standard tech play the one of the best installed base in the world A I on the doorstep of ton of data growth coming back and we’ll call it 10%.
Now.
They’ve cleared the decks.
To me.
It’s a table pounder movement in sales force.
But like we see many, you know, many from an analyst perspective or investors, they’re gonna hit the elevators in this type of environment.
But to me it’s the time to really own a gold standard name.
Do you think?
Listen, Mark Benioff veteran tested to been in the game.
I don’t know what 2020 rush rush when you see a stock crater like this though, Dan, it’s not unreasonable probably for some investors to say, OK, look at the, I mean, look at that.
It’s nose diving.
Is he still the right guy for this job as they make this transition you’re talking about?
I mean, you’re talking in that Mount Rushmore, I mean, you got Jensen Cook, you, you got, I mean, II I put Benny off mcdermott.
I mean, so the point is if he’s flying the plane, I’m in three, a feeling really comfortable watching Netflix.
And the point is this is a situation where they have it all in front of him.
And I just view this as one.
It’s a speed bump, not the start of a structural decline.
I think we sit here 69 months from now and this is potentially a historical buying opportunity for sales force.
I just want to press you on this a little bit more.
OK?
So let’s take your plain analogy, you know, it doesn’t matter how good a pilot you are.
If the turbulence is bad enough and they kept saying on the call over and over again, measured buying behavior, which is code for our clients are not spending as much, right?
They’re in a retrenching environment.
So even if sales force itself is in a transition and things are gonna get, you know, it’s gonna get the company in a better place.
Nine months from now, what’s to say that the buying environment is gonna be any better?
And just to continue on that point, it would be going through 30 minutes of turbulence knowing your land in, in Ka.
OK.
So, so the point in my view is that on the other side of that is the fourth industrial revolution, the 1995 K. I mean that’s where you can say maw, but the point we don’t want again.
But, but my view is that when you’re looking at the A I revolution, you’re looking at the 2nd, 3rd, 4th derivatives sales force front and center, which is why Tibet against Benioff, it’s like betting against the Rangers in the playoffs.
Benioff, you know, he did have those activists circling, right?
But he gets to work, he gets religion.
Where, where do you see margins headed from here?
I think that’s it.
Free cash flow is increasing.
So you look at margins, margins are actually uptick and that they raise guidance from an EPS perspective.
Now look in this type of market, any negative news stocks are gonna get like there’s no overreacted.
I believe we sit here weeks, month from now we look at this and look at the recovery because they get investors that may be missed.
Because remember if you go back 18 months ago, New York City cab drivers, baring sales are activists.
10 down.
What could happen in the stock?
I think we go through again a groundhog day situation there.
And if someone’s leading and I’m betting, I mean, I’m betting on Benny off.
Um, I wanna ask you about M and A for a sec because they, you know, he sort of was a little bit coy when it came to more acquisitions on the call, didn’t, they wouldn’t address informatica directly.
Should investors brace themselves for another large scale acquisition attempt on the part of sales force?
And is that, would that be a good thing?
Look initially, it would be negative and delusion.
We saw that with Slack, which I think continue to play the company a bit.
But joy at the end of the day, like we’re talking about a game of Thrones playing out intact and what that means as you look at A I, you’re gonna see M and a consolidation continue to, I think accelerate.
So this tip of the iceberg to what I see just a massive phase of consolidation and Benny off the deal maker is not gonna be on the outside looking in if a deal comes through, that makes sense.
But to that point, they’re not gonna be compelled to just do any deal.
I continue to believe that deal if we’re talking about ABC D that’s a B minus deal.
If an A plus deal comes and the valuations, right.
Maybe on the private side, then Benioff, the, the, you know, ultimately one of the best poker players out there will do that.
But for an informatic, I don’t see it.
Get you out of here.
I, one thing I need to get a Dan Ives vibe check on Palant here because they’re making news this week deal.
$480 million contract for the dod.
You’re still a fan.
It’s the messy of A I, to me, it’s, it’s really one of the, probably the best pure point A I name out there that they got way over sold on earnings.
And now as you see, Carp and what the team is doing, they’re just executing brick by brick.
I think it, it continues to be probably the most underestimated A I play, maybe tech play in the market today.
All right, Dan, we gotta talk about something outside of tech because a lot of people saw the New York Post has named you the best dressed man on Wall Street, obviously very distinctive for what?
And, and, and you know, Josh, and I have known you for a while this, you have ratcheted up through the years.
You have turned it and you kept on turning.
Look, this has been and, you know, we’ve known each other for a decade of fees, sort of approach to evolution like sales force.
That’s what it really is.
It’s just, it’s like going from perpetual subscription model and you land in Kona, that’s what you, you, you would look very at home in Kona and, and it’s true.
Look, I, uh, you know, as I talk about in the article is, it’s always trying to sort of have a vibe where, you know, I don’t know what I’m gonna wear on that day, but it gives me a more relaxed feel and it’s one where, you know, I think many, you know, see how I dress and also it takes down to not some of the seriousness in a very serious that you got your shades too.
I got my shades and look and, and again, I’m just like, I’m just trying to follow the lead of, of you and whip in, in terms of, you know, where the, we can, I mean, you can have a little more fun.
Josh, I, maybe I’m just too conservative.
It’s too serious to lighten this whole thing up.
That’s, I know, but I go here s and P hit 6000.
Lipton’s wearing a purple sport when S and P hit 6000.
I bring my purple sport shaka and my, I love this.
It’s a television.
Ok.
Financially, an awesome television producer right there.
Thanks for coming in.
Great to see you.
Signup bonus from
