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Salesforce Borrows $25 Billion to Buy Back Its Own Stock. Wall Street Is Worried

Salesforce shares are currently trading at $177.51. The company recently announced first-quarter earnings for fiscal year 2027 that exceeded revenue expectations, and also plans to repurchase shares using $25 billion in borrowed money. Investors are now trying to determine if the growing interest in Salesforce’s artificial intelligence offerings will be enough to counter the company’s lowered forecast for free cash flow.

Barclays lowered its price target for the stock to $236, a 6.3% decrease, while Jefferies maintains a $250 target. Currently, the stock is approaching a key resistance level within a downward trend that began in January. Trading in options suggests investors are increasingly preparing for a potential price decline.

Q1 Top-Line Beat Validates the AI Pivot

Salesforce announced first-quarter revenue of $11.1 billion, a 13% increase compared to the same time last year. Their adjusted earnings per share (EPS) were $3.88, exceeding expectations of $3.12. EPS is a measure of company profit per share. Salesforce also reported an adjusted operating margin of 34.8%.

Salesforce (CRM) announced its first-quarter earnings today, along with a $25 billion share buyback program.

Here are the key results:

* Revenue: $11.10 billion, exceeding estimates of $11.05 billion.
* Adjusted Earnings Per Share (EPS): $3.88, significantly higher than the expected $3.12.
* Adjusted Operating Margin: 34.8%

Looking ahead to the second quarter, Salesforce anticipates:

* Revenue between $11.27 and $11.35 billion, slightly below estimates of $11.36 billion.
* Adjusted EPS between $3.25 and $3.27.

— WOLF (@WOLF_Financial) May 27, 2026

The company’s financial results were better than expected in all areas, confirming that the shift away from traditional software licensing is working as planned.

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Salesforce’s Agentforce and Data 360 platforms together generated $3.4 billion in annual recurring revenue (ARR), more than doubling from the previous year. ARR represents the predictable yearly income from existing customer subscriptions. This significant growth indicates that customers are increasingly adopting and expanding their use of Salesforce’s AI solutions.

Customers have used Agentforce and Slack to complete 3.8 billion AI-powered tasks – what we call Agentic Work Units, or AWUs. Unlike traditional software pricing based on the number of users, we measure success by the actual work the AI does for customers. This shift is important because Salesforce is moving towards a payment model based on results, not just software licenses.

As an analyst, I’m seeing incredible growth in Salesforce’s Agentforce. In the first quarter, we processed a massive 28.6 trillion tokens – that’s a 152% jump from the previous quarter! We then turned those tokens into 3.8 billion ‘Agentic Work Units’ for our customers, which represents a 111% increase quarter-over-quarter. These numbers really highlight the accelerating value we’re delivering.

— Marc Benioff (@Benioff) May 28, 2026

As a crypto investor watching Salesforce, I’m really impressed with their recent numbers. Their public sector business is booming, hitting over $2 billion in annual revenue with a 23% jump year-over-year. And their new Slack Model Context Protocol is gaining traction fast – over a million active users in just six weeks! It’s clear to me that Salesforce isn’t just relying on their traditional CRM business anymore; they’ve got multiple areas driving growth, which is a really positive sign.

Although artificial intelligence generated a lot of buzz this quarter, the biggest development wasn’t about how the company was running its business – it was a financial decision. This change in strategy caused investors to pay more attention to the company’s assets and debts than to its revenue.

$25 Billion Debt Move Triggers Wall Street’s Caution

I was pretty surprised to see Salesforce just dropped $25 billion to buy back a chunk of its own stock. It’s called an accelerated share repurchase, or ASR, and it’s basically a really quick way for a company to reduce the number of shares available. It’s a big move, and happens fast!

When a company buys back its own stock, there are fewer shares available, which means each remaining share represents a larger ownership stake. This can increase earnings per share, even if the company’s overall profits haven’t changed. This quarter, Salesforce returned $27.5 billion to its shareholders through stock buybacks and dividends.

The main issue is the company’s debt. Salesforce now has to pay significant interest – around $317 million each quarter – on its $25 billion debt. This means less money is available for important things like creating new products, paying shareholders, or buying back stock. The interest payments have increased dramatically – from $68 million to $317 million – and this extra cost of $249 million will continue to reduce the company’s available cash each quarter.

Salesforce has lowered its forecast for yearly free cash flow growth to 4-5%, a significant drop from the 9-10% it predicted just last quarter. Free cash flow represents the cash a company has left over after covering its expenses and investments, and its growth indicates how quickly that amount is increasing each year. This slower growth rate means Salesforce will have less money available for things like buying back its own stock, paying dividends to shareholders, or making acquisitions. This change is what concerned financial analysts.

Barclays lowered its price target for Salesforce from $252 to $236, but still recommends buying the stock. Jefferies kept its $250 target price. Barclays made this adjustment because of concerns about the company using debt to repurchase shares, not because they’ve changed their overall positive view of Salesforce and its potential in artificial intelligence.

Looking at underlying growth, the picture isn’t strong. Agentforce Apps, their established software business, only grew by 7% when currency fluctuations are removed. Excluding a one-time boost of $444 million from Informatica, organic growth was around 8.7%.

Salesforce reported solid first-quarter 2027 earnings, with revenue reaching $11.1 billion – a 13% increase compared to last year. This growth was significantly boosted by the recent $8 billion acquisition of Informatica. Company leaders are focusing on a strategy they call the ‘Agentic Enterprise’…

— Finsee (@Finsee_main) May 27, 2026

The company isn’t really growing without the benefits of buying Informatica, which makes it difficult to trust management’s predictions of quicker growth later in the year.

CRM’s Options Markets Load Up on Bearish Bets

Trading activity in options markets suggests analysts are becoming more cautious about Salesforce’s stock. Between May 18th and May 27th, the ratio of put options (bets the stock will fall) to call options (bets the stock will rise) more than doubled, going from 0.33 to 0.76. This indicates a growing number of investors are preparing for a potential price decrease.

A reading of around 0.76 indicates that traders were buying approximately three put options for every four call options. This represents a significant change in market sentiment compared to the level seen on May 18th.

Open interest, which represents the total number of options contracts that haven’t been closed, increased to 0.77 for put options. This move from limited hedging activity to increased put option buying indicates that large institutions are purchasing protection against potential price drops. These professional traders aren’t participating in the recent market rebound.

Analysts are wondering if the new AI-powered solutions are causing customers to reduce their subscriptions to the traditional Sales and Service Cloud. While this hasn’t shown up in the financial results yet, it’s contributing to a negative outlook on the company. The concern is that the very AI driving Salesforce’s growth could also slowly decrease revenue from its core Sales and Service Cloud products, and this worry is visible in the stock’s performance.

Trading activity in Salesforce stock has increased since May 19th. A significant spike in selling occurred just before the company announced its earnings. This suggests that investors are selling their shares – a trend known as distribution – rather than buying, especially as the stock price nears a point of resistance.

The trading volume patterns align with options activity, suggesting that sellers are becoming more active as prices approach the upper end of the recent trading range.

The price has been moving within a defined channel since January. Currently, the upper boundary of that channel is being tested as selling pressure increases. How the price reacts to this resistance will likely determine the trading direction for June.

Salesforce Stock Price Analysis Reveals Key Levels for June

Salesforce stock has been moving within a downward trend for the past five months. After hitting a low of $164.59 in early May, the stock price briefly increased, but that increase has now reached a point of resistance around $183.80.

The price needs to rise above $178.35, which is the level indicated by the 20-day exponential moving average. This average helps smooth out price fluctuations, giving more importance to recent prices. If the price falls below this level, it could drop to $168.83 and then potentially to $153.63.

The 50-day Exponential Moving Average is currently at $183.42, which is also a key resistance level. If the price closes above $183, the market outlook becomes neutral. After that, the next price targets to watch are $193.40 and the 100-day Exponential Moving Average at $195.97.

If the current downward trend line continues to hold and the price doesn’t quickly rise above the 20-day moving average, the price could fall to $153.63 – a potential 13.22% drop from its current level. However, traders should watch for the price to break above the 20-day moving average or exceed $183, as these would signal a potential shift to an upward trend in the near future.

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2026-05-28 18:22