For much of the past decade, we have heard that software is eating the world. But now it seems that AI is eating software. That's Melius Research's call analysts, as they downgraded the one-time market Darling Adobe to a sell rating, so it went on Monday again. The compelling notes highlight the profound ripple effect AI has created in the stock market – and investors must be Attune. The club name Salesforce is located in the crosshairs of the ever-changing landscape, and we cannot ignore this fact. This is the main reason why stock and enterprise software peers Atlassian and Workday struggled in 2025. In Melius's view, the rise of AI is software for local data centers for cloud computing. Historically, companies will maintain their own data centers internally, requiring substantial investment in hardware and engineer teams to maintain and resolve any issues. But today, companies can simply jump on the cloud computing trend by using companies like Amazon Web Services, Microsoft's Azure, and Alphabet's Google Cloud. AWS became the first modern cloud service launched in 2006. The rise of the cloud is bad news for stocks of on-premises hardware providers such as Dell, HP and IBM. With the shift to cloud computing, Melius noted that these companies have seen huge revenues, with a classic sign of market capitalization, and investors believe growth is slower. “Just when you think the coast is clear, their PE multiples are getting lower and lower – numbers from the 20s to the middle,” Melius wrote on Monday. The club name Microsoft is also a key provider of local server software. However, Microsoft did tweak its strategy by launching its cloud service Azure. The cloud was a priority for CEO Satya Nadella upon taking over in early 2014, and it's paid off handsomely for investors — just take a look at the stock chart versus the S & P 500. MSFT .SPX mountain 2013-12-31 Microsoft's stock performance versus the S & P 500 since the start of 2014. Microsoft would have no doubt been on that list of on-premise fallen angels — even if not a hardware play like HP and Dell – if they don't jump on the cloud, they connect fate with on-premises hardware providers. Azure is the second largest cloud behind AWS, and AZURE is seeing growth thanks to AI. Courses from Microsoft: If your business model is breaking, you can still adapt, survive and thrive. However, if you are disturbed and unable to adapt, the valuation that investors are willing to pay for your stock will reflect that failure. Instead, investors will continue to have the disruptors in question, and currently, AI players are pushing forward with software, as a service space. This business model is often abbreviated as SaaS and has become very popular not long ago. Rather than paying for a permanent license to use a specific version of the software, SaaS companies sell products on a subscription basis, bringing a more predictable source of recurring revenue, where investors are willing to allocate higher multiples. It usually involves a “seat model” that companies pay based on the number of employees using the software. Melius believes this is a real threat. “We think companies are increasingly aware that AI tools can help cut expensive knowledge workers with these expensive SaaS seats. In fact, since the start of the AI boom, OPEX has sold a percentage of one percent of technology leaders. One way they do this is to reduce workers at SaaS’s largest consumers who may be affected by other companies. “We think there will be FOMOs in all industries to cut costs and increase stocks – SaaS is the casualty as AI adoption accelerates.” “It is certain that while this is a potential issue with Salesforce, many other technology names in the portfolio can benefit. These include Microsoft and Amazon, as their cloud services enable others to take advantage of AI. Indeed, Melius analysts themselves argue: “While SaaS should be avoided, the 'software' has the cloud's 'software' [such as Microsoft and Oracle] “Another area of fuel demand is another area of accelerating demand, an acceleration of AI agents, engaged in SaaS and fuel demand for more computing,” Melius added. Agent AI is an AI system that can complete certain tasks without manual intervention and is in sales including AI, including deceptiveness of AI and deceptiveness in sales. A company you know can get ripped apart while reading Melius’s research on Monday, and we think Melius will have some good views after all. – Others also believe that AI is a life of a lifetime, and its meaning is far more than the transformations of the cloud than the past decade. Agents so that it can help customers enter the AI era faster, and also extract more AI-oriented revenue streams from Adobe's customers, which can help you extract more revenue from those seats of customers. Unlike Adobe, salespeople are almost targeting business sales, and more sales will work harder, they will be more hurt, and they will be harder to post a little bit of information, and are increasingly in trouble. While Salesforce isn't offering Microsoft on Salesforce from CRM Arena, the company obviously has a strategy. Lower Salesforce's stake to 2 ratings held because we want to better understand how much Salesforce has been destroyed or whether it can indeed adapt to the new world, and we've already lowered a lot in this year's stock. For Jim Cramer's CNBC Investment Club, you will do 45 minutes with Jim before trading, then buy or sell stocks in his Charitable Trust investment group, if Jim talks about 72 hours of trade on CNBC TV, please issue the above trade agencies in our trade. Disclaimer.
Home » A new Wall Street study prompts us to change our rating for Salesforce
A new Wall Street study prompts us to change our rating for Salesforce
- by admin