Is the activist heat on Salesforce ramping back up? The market sure thinks so

s of Salesforce rallied Friday as Wall Street bets that activist pressure may again help revive an otherwise dragging stock

Jeff Smith's Starboard Value increased its stake in Salesforce by 47% during the second quarter, according to a securities filing , ending the month of June with a position worth $341.5 million

Starboard also added to its Salesforce holdings in the first quarter

Multiple other activist firms swarmed around Salesforce and echoed Starboard's calls for greater efficiency and fitability, among other demands

Starboard had sold down a large chunk of its stake before beginning to buy this year

Starboard's increased stake in Salesforce could once more positively influence the company's direction, according to D.A

Davidson analysts led by Gil Luria. "We believe this is a signal there will be another round of investor activism and increased pressure on management to refocus on growth of the core , additional margin expansion, and hold off on dilutive M & A," Luria wrote to clients Friday

In the same note, D.A

Davidson upgraded the stock to a hold-equivalent rating from sell, arguing the company's challenges have been appriately priced in

CRM 1Y mountain Salesforce's stock performance over the past 12 months

Among Salesforce's issues is a belief that artificial intelligence is threatening the model of enterprise software companies that count on their customers growing their headcount, thereby paying for more software licenses

It's often called the seat-based model, and earlier this week, its perceived shortcomings in the generative AI era was the subject of a note from Melius Re

There is "some truth" to Melius Re's idea that AI is eating software, Jim Cramer acknowledged during the August Monthly Meeting on Thursday

At the same time, the hasn't been ready to cut bait on its long-held position in the stock

Starboard's intentions this time around aren't — the firm didn't respond to CNBC's request for — but its maneuvering nevertheless represents a glimmer of hope

In October 2024, Smith of Starboard complimented Salesforce's fitability imvements but said he still believed "there's a lot more to go." "If they execute on this plan, the stock could turn around in the same way it did last time Starboard helped CRM steer the ship," D.A

Davidson's Luria wrote to CNBC in an Friday

Luria had been among those on the Street worried that Salesforce was neglecting its core for a premature bet on Agentforce, its agentic AI duct suite

It was at the heart of D.A

Davidson's decision in April to initially downgrade Salesforce to a sell rating

Jim disagreed with the sentiment at the time, saying he believed CEO Marc Benioff was backing Agentforce because the Salesforce's core was performing in line with expectations

That wasn't the last of Salesforce's woes

At the time, Jim pushed back on the notion that Salesforce was out of innovative ideas and lent support to Benioff's Agentforce push

Salesforce said in May that Agentforce generates over $100 million in annual recurring revenue and has secured 8,000 deals since its launch last fall, with half of them being paid deals

The recognizes that Salesforce has been painful to own lately. "I keep coming back to the fact that [Benioff] says is really strong," said Jim when asked by a member Salesforce during the August Monthly Meeting

And yet, the stock chart is ugly. "What happens when [ is] not strong?" Jim asked rhetorically

A few important events loom that will help shape our thinking

Then, in mid-October, its annual Dreamforce conference is on the schedule. "We have to make a decision around" Salesforce by the time of Dreamforce, Jim said. (Jim Cramer's Charitable Trust is long CRM

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