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Salesforce's 30% Plunge Has Cloud ETF Investors Asking: Buying Opportunity or Sector Warning?

MarketDash Editorial Team
4 days ago
Salesforce is trading at its cheapest valuation since going public in 2004, dragging down cloud-focused ETFs. Is this AI disruption panic overdone, or are incumbent SaaS giants facing a real reckoning?

When a blue-chip software company drops 30% in a year and suddenly trades at its lowest valuation in two decades, you have to wonder: is this a generational buying opportunity, or the opening act of something messier?

That's the question facing investors in Salesforce Inc. (CRM), which has cratered this year on mounting anxiety that AI-native upstarts could chip away at its franchise before its own AI initiatives—like Agentforce—start producing real profits. According to a Bloomberg report, the concern isn't just hypothetical hand-wringing. Wall Street analysts haven't budged on their forward estimates in a full year, signaling deep skepticism even as management insists double-digit revenue growth is coming back.

The result? Salesforce now trades at under 19 times forward earnings, compared to a 10-year average of 47 times. It's officially the bargain bin of Big Software—if you're willing to live with the uncertainty.

Cloud ETFs Are Feeling the Heat

For investors holding cloud-themed ETFs, Salesforce's struggle isn't just a single-stock story. The Themes Cloud Computing ETF (CLOD) holds Salesforce at roughly 4.5% of its portfolio, while the Fidelity Cloud Computing ETF (FCLD) has a position just over 4%. Neither weight is portfolio-breaking on its own, but Salesforce sits firmly among their top holdings—enough that CRM's slide leaves a visible mark.

Over the past month, CLOD has dropped more than 5%, and FCLD has fallen over 7%. The pain isn't isolated either. Morgan Stanley's SaaS basket is down 12% in 2025, reflecting how deeply AI disruption fears have seeped into the sector.

So, Is This a Buy?

Here's where it gets interesting. If you're a long-term investor with patience for volatility, there's a legitimate case to be made. Both CLOD and FCLD offer diversified exposure to cloud infrastructure, SaaS platforms, and next-generation enterprise software—all areas still riding multi-year tailwinds from AI adoption, data growth, and enterprise automation.

Salesforce itself expects double-digit revenue growth ahead. Analysts quoted by Bloomberg suggest this could be a classic buy-the-dip moment. With SaaS valuations now sitting at a 30-40% discount to fundamentals, according to analysts, these funds might be at a cyclical entry point.

But let's be clear: near-term choppiness is practically guaranteed. If AI-native competitors keep stealing mindshare before the incumbents prove they can monetize their own AI strategies, both CLOD and FCLD could stay bumpy for a while. Investors who prefer a smoother ride might want to stick with broader tech funds like the Invesco QQQ Trust (QQQ), where Salesforce carries a much smaller weight.

Still, if Salesforce manages to stabilize—or simply demonstrates it can defend its turf—these cloud ETFs are positioned to capture the rebound. Right now, they look like early access tickets to a sector the market may have marked down a bit too aggressively. Whether that discount reflects wisdom or panic is the multi-billion-dollar question.

Back to News

Salesforce's 30% Plunge Has Cloud ETF Investors Asking: Buying Opportunity or Sector Warning?

MarketDash Editorial Team
4 days ago
Salesforce is trading at its cheapest valuation since going public in 2004, dragging down cloud-focused ETFs. Is this AI disruption panic overdone, or are incumbent SaaS giants facing a real reckoning?

When a blue-chip software company drops 30% in a year and suddenly trades at its lowest valuation in two decades, you have to wonder: is this a generational buying opportunity, or the opening act of something messier?

That's the question facing investors in Salesforce Inc. (CRM), which has cratered this year on mounting anxiety that AI-native upstarts could chip away at its franchise before its own AI initiatives—like Agentforce—start producing real profits. According to a Bloomberg report, the concern isn't just hypothetical hand-wringing. Wall Street analysts haven't budged on their forward estimates in a full year, signaling deep skepticism even as management insists double-digit revenue growth is coming back.

The result? Salesforce now trades at under 19 times forward earnings, compared to a 10-year average of 47 times. It's officially the bargain bin of Big Software—if you're willing to live with the uncertainty.

Cloud ETFs Are Feeling the Heat

For investors holding cloud-themed ETFs, Salesforce's struggle isn't just a single-stock story. The Themes Cloud Computing ETF (CLOD) holds Salesforce at roughly 4.5% of its portfolio, while the Fidelity Cloud Computing ETF (FCLD) has a position just over 4%. Neither weight is portfolio-breaking on its own, but Salesforce sits firmly among their top holdings—enough that CRM's slide leaves a visible mark.

Over the past month, CLOD has dropped more than 5%, and FCLD has fallen over 7%. The pain isn't isolated either. Morgan Stanley's SaaS basket is down 12% in 2025, reflecting how deeply AI disruption fears have seeped into the sector.

So, Is This a Buy?

Here's where it gets interesting. If you're a long-term investor with patience for volatility, there's a legitimate case to be made. Both CLOD and FCLD offer diversified exposure to cloud infrastructure, SaaS platforms, and next-generation enterprise software—all areas still riding multi-year tailwinds from AI adoption, data growth, and enterprise automation.

Salesforce itself expects double-digit revenue growth ahead. Analysts quoted by Bloomberg suggest this could be a classic buy-the-dip moment. With SaaS valuations now sitting at a 30-40% discount to fundamentals, according to analysts, these funds might be at a cyclical entry point.

But let's be clear: near-term choppiness is practically guaranteed. If AI-native competitors keep stealing mindshare before the incumbents prove they can monetize their own AI strategies, both CLOD and FCLD could stay bumpy for a while. Investors who prefer a smoother ride might want to stick with broader tech funds like the Invesco QQQ Trust (QQQ), where Salesforce carries a much smaller weight.

Still, if Salesforce manages to stabilize—or simply demonstrates it can defend its turf—these cloud ETFs are positioned to capture the rebound. Right now, they look like early access tickets to a sector the market may have marked down a bit too aggressively. Whether that discount reflects wisdom or panic is the multi-billion-dollar question.