Think back to 2015. You might have been streaming your favorite shows, scrolling through new social media apps, or just starting to use cloud-based tools at work. If at that moment you had put $1,000 into Salesforce stock, you would be sitting on a very different number today.
So, what would that investment look like now in 2025? Let us break it down in simple terms.
How much would your $1,000 be worth today?
If you invested $1,000 in Salesforce stock 10 years ago, that investment would now be worth about $3,470. That is more than triple your original amount.
- This equals an annualized return of 13.2%.
- For comparison, the S&P 500 returned around 12.9% during the same period.
- If you had reinvested dividends from the S&P 500, you would actually have done even better, ending with about $4,000.
Salesforce only started paying dividends in 2024, so earlier gains were driven purely by stock price growth.
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How has Salesforce stock compared to the S&P 500?
When you measure performance, it is always smart to compare to the overall market. Over the last decade:
- Salesforce slightly beat the market’s average return.
- However, the S&P 500 with reinvested dividends pulled ahead of Salesforce.
- This shows how important dividends can be when looking at long-term investments.
Still, Salesforce’s growth has been strong. Turning $1,000 into nearly $3,500 in just 10 years is something most investors would be happy about.
What is driving the performance of Salesforce?
Salesforce has been the market leader for cloud-based customer relationship management (CRM). Businesses across the globe utilize its software for managing sales, marketing, and customer service.
Some key factors behind the growth of its stock include:
- Very high demand for cloud software: Organizations are relying on cloud tools to be more efficient.
- Strong margins: Salesforce has always maintained a gross margin of some 70%.
- Acquisitions: Over time, Salesforce has bought companies like Slack to expand.
But then again, there are the challenges. The stock dropped more than 25% amid weaker guidance and concerns about its ability to compete in the faster-growing AI space in recent years.
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Is Salesforce stock worth buying today?
The big question now will be: Is Salesforce still a good investment? Currently, its forward price-to-earnings ratio is about 21. This is below its five-year average of 27, suggesting that the stock may in fact be undervalued.
A few of the factors to ponder over today if you are considering investing include the following:
- Opportunities: It still enjoys a dominant position in the CRM market and continues working on integrating AI into its products.
- Threats: There is increasing competition, and some investors fear Salesforce may not be the leader in AI.
- Valuation: Lastly, that lower P/E would make it an attractive pick if the company proves to deliver strong growth in the coming years.
What does this mean for you as an investor?
If you had invested in Salesforce 10 years ago, you would have made a solid return. But investing is not only about looking back. It is about asking what comes next.
Salesforce still has strengths in the cloud market, but future growth will depend heavily on how well it adapts to AI and continues to innovate. For you, that means weighing the potential rewards against the risks before deciding if Salesforce deserves a place in your portfolio today.
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