Investment management firm Vulcan Value Partners has highlighted Salesforce as a key contributor to its portfolio performance in its fourth-quarter 2025 investor letter. The company, which manages multiple investment strategies including Large Cap, Small Cap, and Focus composites, identified Salesforce as a notable position within its Focus and Focus Plus Strategies during a period when the firm achieved positive returns across all its strategies despite challenging market conditions.
According to the investor letter, Salesforce stock experienced significant volatility with a one-month return of negative 13.73 percent and a 52-week decline of 36.27 percent. As of January 26, 2026, Salesforce shares closed at $229.40 per share with a market capitalization of $218.389 billion. Despite the stock’s recent performance challenges, Vulcan Value Partners maintained its position in the company.
Why Vulcan Value Partners Remains Confident in Salesforce
In its quarterly letter, Vulcan Value Partners described Salesforce as the world’s leading Software-as-a-Service vendor for customer relationship management and salesforce automation software. The investment firm emphasized that Salesforce offers numerous products beyond its core CRM platform, including marketing automation, customer service automation, analytics, application integration, and enterprise collaboration tools.
The firm pointed to several positive developments that support its investment thesis. According to the letter, Salesforce held an Investor Day where management provided targets through fiscal year 2030 for organic top-line growth exceeding 10 percent along with significant margin expansion. Additionally, the company reported promising results related to its Agentforce AI agent platform, including triple-digit revenue growth and substantial new customer wins.
Salesforce Investment Thesis Centers on Market Dominance
Vulcan Value Partners highlighted several competitive advantages that make Salesforce attractive despite recent stock price declines. The firm noted that Salesforce maintains deep entrenchment within its customer base with high retention rates and recurring revenue streams. The scalable nature of the business model offers high margin potential, according to the investment letter.
The investment manager emphasized that Salesforce demonstrates dominance across its product offerings while constantly innovating with new solutions like Agentforce. These innovations are designed to deepen customer relationships and drive business growth, the firm stated in its letter. The company’s position in the CRM software market provides a strong foundation for long-term value creation.
Hedge Fund Sentiment and Market Context
According to hedge fund data, 119 hedge fund portfolios held Salesforce at the end of the third quarter of 2025, compared to 121 in the previous quarter. This placed Salesforce in the 16th position among the most popular stocks held by hedge funds. The modest decline in hedge fund ownership reflects broader market uncertainty during the period.
Meanwhile, Salesforce reported third-quarter revenue of $10.26 billion, representing a 9 percent year-over-year increase and 8 percent growth in constant currency, according to company disclosures. However, Vulcan Value Partners’ letter comes amid broader market concerns about overvaluation, which the firm compared to the late 1990s dot-com bubble, particularly regarding artificial intelligence investments.
Investment Strategy Amid Market Volatility
Vulcan Value Partners achieved positive returns across all strategies in 2025 while improving price-to-value ratios in an overvalued market environment. The All-Cap Composite returned 10.7 percent year-to-date, while the Small Cap Composite gained 9.5 percent. The firm emphasized its commitment to investment discipline and prioritizing safety over short-term performance gains.
The investment manager indicated it continues monitoring Salesforce’s progress in executing its growth strategy and margin expansion targets through 2030. However, the firm has not provided specific guidance on whether it plans to adjust its Salesforce position in response to recent stock price movements or changing market conditions.
