Analyzing Salesforce, Inc. (NYSE:CRM): A Top Activist Target
In our recent exploration of activist investing, we highlighted Jeff Smith’s Top 10 Activist Targets and Their Returns Compared to the S&P 500. Today, we’ll delve into the performance of Salesforce, Inc. (NYSE:CRM) within this elite list, examining how it measures against other investments backed by activist strategies.
Jeff Smith: The Activist Investor You Should Know
Jeff Smith is often dubbed the “most feared man” in corporate America, thanks to his track record of successful and bold activist campaigns. With experience on over 17 company boards and having chaired four, he has distinguished himself in the world of activist investing. As the founder of Starboard Value LP, which he established in 2011 with two partners, Smith has utilized rigorous analytical strategies to pinpoint undervalued stocks, positioning his hedge fund as a significant player in the activist landscape.
Throughout the past decade, Smith’s approach has been characterized by a commitment to unlocking shareholder value. Typical strategies include advocating for significant board or management changes, and even pushing for the sale of parts or the entirety of businesses. This aggressive yet calculated methodology has helped grow Starboard’s assets under management to over $5.5 billion, while raising the average market valuation of the companies they target from around $7 billion in 2020 to over $45 billion today.
The Performance Landscape
While 2024 proved to be a challenging year for Starboard Value LP, yielding less than 5% returns, Jeff Smith’s hedge fund has consistently outperformed in a broader context. The average return for activist funds in 2024 was 11.5%, with notable competitors like ValueAct Capital Management and Sachem Head Capital Management delivering returns of 21% and 22%, respectively. Despite the underperformance, Smith’s overall strategy has yielded an impressive average return of 25.02% across his 152 campaigns since inception, eclipsing the Russell 2000’s average of 13.65%.
Salesforce (CRM) Performance Overview
Position Initiated: October 2022
Stock Return (Oct 2022 – Apr 2025): 73.45%
S&P 500 Return (Oct 2022 – Apr 2025): 40.82%
Number of Hedge Funds Holding Stakes: 162
Salesforce, Inc. specializes in customer relationship management (CRM) technology, connecting businesses with their customers. Jeff Smith’s involvement started in October 2022 when he recognized significant opportunities for value enhancement within the company—this investment came at a time when Salesforce faced immense pressure due to declining stock prices and concerns over financial performance.
In response to criticism and the pressure from activist investors, Salesforce took significant steps to bolster its operational efficiency. The company achieved an operating margin exceeding 40% by implementing strategic layoffs and revamping its management team, which included appointing new board members to align with Starboard’s vision.
Despite CRM’s impressive stock performance, ranking 9th on our list of activist targets, we believe that there are even more lucrative opportunities available in the AI sector. For instance, while numerous popular AI stocks have seen declines, there is one particularly promising AI stock that trades below five times its earnings, showcasing an attractive investment option worth exploring.
Strategic Insights and Future Considerations
Why is it vital for investors to observe the stocks that hedge funds favor? Our research indicates that mimicking the top stock picks from leading hedge funds can substantially outperform the market. Here at Extreme Investor Network, we employ a methodology in our quarterly newsletter that selects 14 small-cap and large-cap stocks, achieving a remarkable 373.4% return since May 2014—outpacing our benchmark by 218 percentage points.
As we continue to evaluate Salesforce and other activist targets, it’s crucial to keep a pulse on emerging opportunities, particularly in transformative sectors like AI. The investment landscape is ever-evolving, and having the right insights can make all the difference.
READ NEXT: Check out our insights on 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires to stay ahead of the curve.
Disclosure: None. This analysis is presented for informational purposes and draws on various financial media reports.