I have over 20 companies in my Stocks and Shares ISA today, but a couple of them might be gone before the World Cup starts in mid-June. Not because they’ve become bad businesses — I just feel there might be better opportunities elsewhere.
Here’s one that I’m keeping on a short leash, and may well dump soon.
Potential AI disruption?
The stock that could be in the firing line is Salesforce (NYSE:CRM), the world’s largest customer relationship management firm. It allows companies to manage sales, marketing, customer service, and business data on one cloud-based platform.
Salesforce is currently in the middle of a major high-stakes transition. Essentially, it’s betting its future on Agentforce, which is an enterprise AI platform that allows customers to build, test, and deploy AI agents. These can take actions autonomously, helping drive efficiency and productivity.
However, Wall Street isn’t convinced. It thinks advanced coding and automation tools from companies like Anthropic might one day make traditional business software obsolete.
Put simply, if AI agents can eventually do the work, companies might not need as many Salesforce software licenses. And this is the dark cloud of uncertainty hanging over the stock, which is down 31% year to date.
Is there any evidence of AI disruption? Not really, looking at the latest Q1 fiscal 2027 figures. Revenue was up 13% to $11.1bn and earnings per share (EPS) of $3.88 jumped 50% and beat expectations.
CEO Marc Benioff said: “This was an outstanding quarter for Salesforce — record revenue, record deals, and cash flow. Agentic AI is the biggest growth opportunity for our customers, and for Salesforce“.
Agentforce surpassed $1.2bn in annual recurring revenue and 3.8bn tasks have been done by these AI agents. Crucially, this is usage-based revenue for Salesforce.
The reaction worries me
How did Wall Street react to all this? With a shrug of the shoulders, basically, and focused instead on Q2 guidance that was a smidgeon below analysts’ average estimate.
And this is my issue here, because the AI agentic revolution is just starting. Therefore, I fear this S&P 500 stock could be left in the cold for many more years to come.
Then again, the business is doing just fine and trading cheaply at just 19 times next year’s forecast earnings. And Salesforce is buying back an increasing amount of its own shares, which should further boost EPS.
However, while I’m a bit torn, this isn’t a stock I want to allocate more money to. So I’ll probably sell up.
Turnaround play
If so, what would I buy with the cash? Well, I have a few positions that I plan to build out in 2026.
One of them is Diageo, a new holding for me. This is a turnaround play, with the new management team focused on making the spirits giant more competitive to boost volumes in drinks categories that are growing.
The FTSE 100 stock has been battered during the cost-of-living crisis, which might intensify later this year. But it does offer a 3% forward dividend yield and globally diversified sales driven by top-tier brands like Johnnie Walker, Tanqueray, and Guinness.
I note broker RBC Capital Markets just upgraded Diageo, giving the stock a £20 price target (it’s currently £16). Not guaranteed, of course, but an encouraging vote of confidence.
Should you invest £5,000 in Salesforce right now?
When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.
And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Salesforce made the list?
Ben McPoland owns shares of Diageo and Salesforce.
