"Ives' argument hinges on a fundamental belief that "artificial intelligence will complement existing software models rather than displace them." He's not alone. Morgan Stanley ( NYSE:MS) recently argued that "generative AI could add approximately $400 billion to the broader Enterprise Software Total Addressable Market by 2028" and noted that software multiples have compressed 33% since October 2025. Goldman Sachs ( NYSE:GS) CEO David Solomon echoed this view, calling the "AI-driven software selloff overdone" and suggesting many companies will adapt successfully."
"The valuation case is compelling. Salesforce now trades at just 14.4x forward earnings despite posting $900 million in Data Cloud and AI ARR, growing 120% year-over-year. Salesforce CEO Marc Benioff tried to counter the negative narrative on the company's recent earnings call, warning investors to "beware of the false agent" and claiming Salesforce is "light years ahead of other providers." The company's Agentforce platform with 3,000+ paid customers demonstrates its efforts to integrate AI into its existing platform."
Software stocks have plunged amid fears that AI will displace enterprise software, with Salesforce down 28%, ServiceNow down 30.1%, and Microsoft down 17% year-to-date. The selloff has been characterized as the worst in 25 years. Analysts argue AI will complement rather than replace existing software, and that generative AI could expand the enterprise software TAM by roughly $400 billion by 2028. Software multiples have compressed about 33% since October 2025, producing valuation compression. Salesforce trades near 14.4x forward earnings despite $900 million in Data Cloud and AI ARR growing 120% year-over-year. Salesforce's Agentforce counts over 3,000 paid customers.
Read at 24/7 Wall St.
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