The Dot Com Bust didn’t kill the Internet. It killed overvaluation. Fast-forward to today. AI doesn’t eliminate moats — it reshapes them. So, let’s talk about Salesforce Inc. as a contrarian AI trade, writes Nicholas Vardy, editor of The Global Guru.
Artificial Intelligence was supposed to be the ultimate profit engine for software companies. Instead, it’s suddenly being treated as their executioner. Investors are now asking: If businesses can build applications with a few prompts to frontier AI models, why pay premium prices for SaaS platforms?
That fear has triggered a sharp repricing across software stocks. But here’s what seasoned traders understand: When the narrative flips too fast, the market usually overshoots. And overshooting creates opportunity.
Salesforce Inc. Stock Chart
The current debate is being framed as binary: Either SaaS survives intact, or AI makes it obsolete. History tells us that’s almost never how technological shifts play out. Railroads didn’t eliminate all prior transport overnight. The Internet didn’t eliminate all retailers. Cloud computing didn’t destroy every legacy IT vendor.
Technology reshuffles power. It rarely wipes the board clean. The question isn’t “Will AI disrupt software?” Of course it will. The real question is: Which companies are structurally protected — and which were living on borrowed valuation?
Salesforce sits on decades of structured enterprise customer data across 150,000+ organizations. That data isn’t replicated with a prompt. Data gravity creates durability.
Mission-critical software isn’t easily replaced, either. CRM systems, compliance platforms, HR infrastructure — these are deeply embedded in corporate processes. Switching costs are real. Disruption is expensive.
As for valuation, this may be the most important factor. At 100x earnings, perfection is required. At 30x – 35x earnings with strong cash flow? You only need reasonable execution. Investing is about asymmetry — not certainty.
Salesforce stock has fallen sharply because investors are worried that AI commoditizes CRM functionality. But CEO Marc Benioff didn’t discover AI last quarter. Salesforce has been building toward this shift for years. At roughly 35x trailing earnings, Salesforce is no longer priced like a hyper-growth story. It’s priced like a mature platform facing uncertainty.
Narrative panic creates entry points — if valuation supports it.
About the Author
Based in London, Nicholas Vardy is a widely recognized expert on global investing, financial history, and trading psychology. A former global emerging markets portfolio manager for Janus Henderson, Mr. Vardy is currently portfolio manager at VFO asset management, a family office. He has been a regular commentator on CNN International and Fox Business Network.
Mr. Vardy has been an invited speaker to Cambridge University's Judge Business School, the University of Chicago's Booth Graduate School of Business, NYU Stern Business School, and the Corvinus Business School in Budapest, Hungary. He is currently completing a forthcoming book: This Time It's Different': A History of Financial Manias.
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