Salesforce Spends $27 Billion on Buybacks Amid AI Fears

Salesforce CEO Marc Benioff dismissed claims that artificial intelligence will obsolete the company's business model, stating that "The software bears are dead wrong." Despite this conviction, Salesforce shares fell over 25% in 2026, hitting a multiyear low of $146.32 in June during a broader software-as-a-service sector sell-off termed the "SaaSpocalypse." Investors fear that generative AI and "vibe coding" may allow companies to build custom software rather than paying for subscriptions.

To counter the price decline, Salesforce executed a record $27 billion in stock buybacks during the first quarter of 2026. The company funded these repurchases by taking on significant debt through bonds with interest rates between 4.5% and 6.7%, betting that its valuation of 14 times forward earnings makes equity cheaper than debt. Benioff maintains that AI will benefit the company through its Data 360 and Agentforce services, the latter of which saw usage jump to 1.6 billion times in the first quarter.

Financial performance remains strong despite market volatility. Salesforce reported record revenue of $11.1 billion for its fiscal first quarter ended April 30, a 13% year-over-year increase, and raised its full-year revenue forecast to between $45.9 billion and $46.2 billion. The company aims to reach an adjusted operating margin of approximately 40% by fiscal 2030. Citigroup raised its share price target for the company to $204 on August 18, while Goldman Sachs CEO David Solomon suggested the sector-wide sell-off was excessive.