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D.A. Davidson head of technology research Gil Luria joins Market Domination to discuss Salesforce (CRM) earnings and the company's trajectory. Luria says Salesforce is "too focused" on artificial intelligence (AI), as the other parts of its business "rapidly" decelerate and the company loses market share to competitors. Luria has the equivalent of a Sell rating on the stock.
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Gil, another name you cover which is reported results, and I'd love to get your take on this too would be Salesforce. Uh investors seem disappointed in that. You have, I I believe Gil, the equivalent of a sell on that name. How come?
Because uh, well, we're all excited about AI, and we agree that AI is going to transform all of software over time. We feel like uh, Salesforce may have overcorrected to AI. They have a $1 billion AI business that they are focusing all their attention in, all their attention on. And and then the $40 billion business that they have doing everything else is decelerating very rapidly. And we're concerned that the the over correction onto the AI may be part of the reason the rest of the businesses decelerating and and then they should probably spend more attention on the marketing cloud and the sales cloud and the service cloud, uh, in order to get those businesses back up because right now Salesforce is just a source of share gains for a slew of other companies, a HubSpot and service now and Braze and Clavio and Shopify that are taking share from Salesforce because Salesforce is too focused on that shiny object.
