ServiceNow is mentioned as a higher-quality business with stronger organic growth compared to Salesforce, but it trades at a higher valuation.
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No company can escape Salesforce
Investing Moats with VarunMay 11, 2026
The creator analyzes Salesforce's current stock performance, business model, and future prospects. Despite a significant price drop, the business model is rated highly due to deep customer embedding and a strong data moat. However, risks include slowing organic growth, a transition to consumption-based pricing, and potential margin compression due to AI. The creator views the stock as cheap but not necessarily a buy, highlighting mediocre returns on capital and uncertainty around the new pricing model. The creator discusses Salesforce, noting its solid business fundamentals like high Fortune 500 adoption and zero attrition, while acknowledging concerns about capital allocation. The stock is considered attractively priced, offering potential for significant upside if growth initiatives like headless 360 and Agent Force succeed, with a relatively safe downside even in a bear case.
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Salesforce is currently trading at a cheap valuation, but its transition to consumption-based pricing and uncertain future economics make it a hold with potential for index returns or higher if the 'headless' strategy succeeds.
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