Many S&P 500 stocks have taken a big hit in 2025. According to my data provider, around 130 stocks in the index are currently trading 25% or more below their 52-week highs.
As a long-term investor, this market weakness excites me and I’ve been taking advantage of it. Here’s a look at an S&P 500 stock I bought earlier this week.
A new holding for me
The stock I’ve snapped up is Salesforce (NYSE: CRM). It’s a software company that specialises in customer relationship management (CRM) solutions and has a world-class customer base (around 90% of the Fortune 500 use its software).
I’ve taken a small position to start with, paying $268 per share. That’s roughly 27% below the stock’s 52-week high of $369.
Investing in the future
While Salesforce has had a lot of success with its CRM solutions in the past (it generates over $35bn in revenue annually from them today), it’s not the main reason I’ve invested here. What has lured me in is the company’s pivot towards AI agents.
AI agents are software solutions designed to autonomously perform business tasks that humans currently do. They can be used across a range of departments and industries, significantly enhancing efficiency for businesses.
I reckon the market for these agents is going to explode over the next decade. Salesforce CEO Marc Benioff reckons the ‘digital labour’ industry could be worth up to $12trn.
Already, Salesforce is having success with its AI agents (which it calls ‘Agentforce’). Last quarter (ended 31 January), it closed more than 3,000 Agentforce deals.
Benioff says that the companies using them are experiencing “unprecedented levels of productivity, efficiency and cost savings.” So I believe there’s a real opportunity for the company here.
Our goal is to be the #1 provider of digital labour in the world.
Salesforce CEO Marc Benioff
Attractive valuation
Turning to the valuation, the stock is reasonably priced, to my mind. Currently, analysts expect Salesforce to generate earnings per share of $11.20 this financial year and $12.50 next.
That gives us a price-to-earnings (P/E) ratio of 24, falling to 21 using next year’s EPS forecast. That’s not high for a world-class software company with recurring revenues and plenty of growth potential.
Plenty of risks
Of course, there are plenty of risks here. Looking ahead, the company is likely to face competition in the agentic AI space from the likes of Microsoft, ServiceNow, and other software companies so there are no guarantees that it will turn out to be a winner.
A global economic slowdown is another risk factor to consider. This could lead businesses to put a pause on software spending.
Tech stocks could also continue to be volatile. While the stock is nearly 30% off its highs, there’s a chance that it could keep falling.
These risks are why I’ve started with a small position in the stock. Over time, I’ll look to build up the position and grow my holding.
This post was originally published on Motley Fool
