Salesforce seen as undervalued as Dreamforce AI push lifts software focus

Traders Union
All News
Financial News
Salesforce undervalued on AI

Highlights

Salesforce unveils AIForce and Koa at Dreamforce, with shares trading at 15 times forward earnings, prompting views that the stock remains undervalued.
J.B. Hunt drops about 13% after profit warning tied to high fuel costs, with other logistics stocks like FedEx Freight also declining on concerns about elevated energy prices.
Intel surges over 5% after reports of talks with SK Hynix to manufacture memory chips in the U.S., highlighting potential upside for Intel's foundry business.

Dreamforce products and valuation debate

As reported by CNBC, Cramer highlights Salesforce as an enterprise software name he believes remains mispriced despite recent concerns that AI disruption could hurt the company. He says the stock, trading at about 15 times forward earnings, is "way too cheap" after Salesforce rolled out new AI products at Dreamforce.

On Tuesday, Salesforce unveils AIForce, described as a live interface that works across the Salesforce ecosystem. The company also announces Koa, its first reasoning model for Agenforce, developed in partnership with Nvidia.

Cramer also backs Salesforce's debt-funded share buyback announced earlier this year, saying criticism that the move would damage the balance sheet has not materialized. He says the repurchase program ranks among the strongest buybacks he has seen.

Broader market signals for tech and industry

The comments come as the S&P 500 rises ahead of the Federal Reserve's interest-rate decision, with the CME FedWatch Tool showing odds of a rate hike above 90%. Cramer says a rate increase could reassure investors because inflation remains too high, though he adds that longer-term policy calls are harder if tensions involving Iran ease and oil prices fall.

Higher energy costs remain a concern for transport and logistics companies. J.B. Hunt Transport Services falls roughly 13% after warning that elevated fuel costs could hurt profits, and other freight-related names, including FedEx Freight and FedEx, also move lower.

In semiconductors, Intel rises more than 5% after a Reuters report says SK Hynix is in talks with the U.S. chipmaker about making the South Korean company's memory chips in America. While neither company confirms a deal, Cramer says such a customer would be highly significant for Intel's foundry business, a view he says some bearish investors still underestimate.

Our earlier coverage of SK Hynix and Intel’s discussions about producing memory chips in the U.S. explained that the companies were exploring options such as leasing space at Intel’s planned Ohio facility or forming a broader partnership. We also noted that any arrangement could bolster U.S. domestic semiconductor capacity and support Intel’s foundry ambitions, while still facing uncertainties, including potential South Korean review tied to sensitive technology transfer.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.