MW Salesforce's record $50 billion stock-buyback plan is proving controversial on Wall Street

By Christine Ji

Salesforce authorized one of the largest repurchase programs in history as it combats a relentless stock selloff, but some analysts feel the money would be better spent elsewhere

Salesforce returned 99% of its free cash flow to shareholders in the fourth quarter.

Salesforce is looking to buy the dip with a $50 billion share-repurchase program as the software selloff continues to send its stock falling, but Wall Street is wondering if the money would be better spent investing in more artificial-intelligence capabilities.

Salesforce (CRM) announced the initiative during its fourth-quarter earnings report late Wednesday, indicating a massive step-up in the company's plans to return capital to shareholders. This figure replaces its previous authorizations, which D.A. Davidson analyst Gil Luria estimated had about $18 billion remaining.

Salesforce also increased its quarterly dividend by 5.8% to 44 cents per share.

The $50 billion buyback is one of the largest in the history of corporate America, placing Salesforce among the likes of Apple $(AAPL)$, Nvidia (NVDA) and Alphabet $(GOOGL)$ $(GOOG)$. Only eight other companies have issued a share buyback of that size or larger, according to data from Birinyi Associates.

The buyback amount represents 27% of the company's market capitalization of $184.05 billion at current stock prices.

Shares of Salesforce are down 26% year to date, after falling 21% in 2025. They had initially slipped after the earnings announcement late Wednesday as the market digested revenue results that were merely in line with consensus expectations, with weakness in marketing and commerce offsetting strength in Agentforce.

However, the stock reversed course to be up 2.4% in recent morning trading Thursday.

The stock now trades at 11.5 times forward free cash flow, a "meaningful discount" to its large-cap software peer median of 18.2 times, according to William Blair analyst Arjun Bhatia.

"We're using our remarkable cash flows to take advantage," CEO Marc Benioff said of the buyback on the earnings call. "You know, this is not our first SaaSpocalypse" - a reference to software as a service.

"It's just been a great marketing opportunity and a great buying opportunity. And that's why we are doing this incredible repurchase authorization of $50 billion," he added.

In the fourth quarter alone, Salesforce bought back $3.9 billion of its own stock, effectively returning 99% of its free cash flow to shareholders, as D.A. Davidson's Luria pointed out in a note following the report.

See more: Salesforce's stock falls as mixed earnings forecast fails to dispel AI gloom

Still, analysts wondered if there were better uses of the cash to help boost the business. Salesforce's guidance also disappointed investors hoping for a reacceleration of revenue. Stripping away the 3-percentage-point benefit from the company's acquisition of data-management company Informatica, organic constant-currency revenue growth is pegged at a modest 7% to 8%.

"While we view the buyback as a positive testament to management's belief in the [long-term] durability of the business, we question if this is the optimal use of capital," Luria wrote. Salesforce could potentially unlock more shareholder value through strategic mergers and acquisitions, he added.

On the earnings call, Jefferies analyst Brent Thill posed the same question: "Given the falloff in big multiples, why not lean a little harder into acquiring technology and [mergers and acquisitions] versus buying the stock back?"

Benioff responded that past acquisitions such as Slack and Tableau have been dilutive to investors. Salesforce is taking a more disciplined approach to M&A now, he said, and the stock is currently at a "great price."

He also suggested that using debt to fund buybacks could be an effective use of capital. Robin Washington, Salesforce's chief financial and operating officer, added that the buyback doesn't prevent the company from pursuing accretive inorganic growth opportunities, which could include M&A.

With the buyback, Salesforce joins software companies such as Shopify (SHOP), which recently announced its first-ever buyback, and ServiceNow (NOW), whose top executives have paused their scheduled stock sales.

However, for Salesforce, the record share buyback might not be enough to get the stock out of the software penalty box.

"We sense that investors are eagerly awaiting a growth reacceleration and until that is proven out, the stock may be rangebound as concerns about the core business and AI traction prevail," Bhatia wrote.

Read: ServiceNow CEO looks to call a bottom on software stocks with this $3 million move

-Christine Ji

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February 26, 2026 11:02 ET (16:02 GMT)

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