The firm’s looking to raise $25bn in debt to use for share buybacks while its stock’s down. It’s really bold, but is it a brilliant or desperate move?

Software as a service

The stock market’s concerned about artificial intelligence (AI) agents undermining software companies, and Salesforce is one of the biggest potential casualties. 

There are a few ways in which this might happen. The most direct is that customers might just build their own AI agents that don’t need the firm’s user interface.

Even if customers do stick with the company, subscriptions are currently based on the number of users. But this could be set to fall substantially if AI agents replace humans in a big way.

Salesforce is looking to shift its pricing model, but that means lower recurring revenues. And the stock market’s taking that very badly, which is why the share price is falling. 

Debt and buybacks

A company buying back shares when its stock is cheap can be a really good move. It brings down the number of shares outstanding, which helps increase earnings per share.

Doing this with debt though, is hugely risky. The associated borrowing costs mean the company needs to generate enough cash to offset this for the move to work. 

Salesforce’s credit rating was downgraded by Moody’s after the announcement. So the firm could be looking at something like 4.5% in interest on the debt it’s taking on. 

At a price-to-earnings (P/E) ratio of 25, the company’s going to have to grow its earnings for the move to work. If it doesn’t, the consequences could be dire for investors. 

Charter Communications

Another S&P 500 company that’s used debt for share buybacks in recent years is Charter Communications (NASDAQ: CHTR). But that hasn’t worked at all well for investors.

Over the last five years, the firm’s earnings per share have increased by 46% despite net income growing by a much, much lower percentage. That’s the effect of share buybacks in action. 

Unfortunately though, the firm’s debt is up 60%. And while this was cheap when interest rates were low, Charter’s now having to refinance these at higher costs. 

That’s why the stock’s down 64% in the last five years. But the question is whether Salesforce betting big on itself is going to mean it ends up in a similar position.

All-in investing

Charter’s biggest problem is that its core cable TV business has been in decline. And buying back shares hasn’t done anything to change that. 

Could Salesforce be in a similar position? The company’s growth has been slowing recently, but it’s not really the same kind of outright declines – at least, not yet. 

If the company can fend off the AI threat, the move to buy in its own stock is will turn out to be a brilliant one. But if it can’t, the debt could be disastrous. Which is why I’m looking elsewhere.

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However, the sell-off is overblown, according to Wedbush Securities managing director Dan Ives. He reckons this is the most disconnected trade he’s seen in his multi-decade Wall Street career, and he’s highlighted a stock offering a ‘historical’ buying opportunity.

A disconnect between stock prices and fundamentals

Ives – a well-known tech analyst – has been a vocal critic of the recent software crash. Speaking on CNBC recently, he said that the ‘AI is going to kill software’ narrative is a doomsday scenario that ignores reality.

In his view, large enterprise businesses aren’t suddenly going to replace established software infrastructure for unproven AI solutions. He believes that software from the likes of Microsoft and Oracle, and all the related data, is so entrenched in enterprises today that these software companies have moats.

It’s worth pointing out that Ives does believe that some software firms will be disrupted by AI. However, overall, he believes there’s a massive disconnect between stock prices and fundamentals at present.

He sees the current sell-off as a “DeepSeek-type moment” in which investor panic is unjustified. Looking ahead, he believes that this will turn out to be a golden buying opportunity.

A stock that could rise 100%

Now, on CNBC, Ives highlighted a few different stocks that he sees as oversold at present. However, one he really focused on was Salesforce (NYSE: CRM). It’s taken a massive hit this year, falling from around $265 to $180. At today’s share price, it’s about 50% below its all-time highs.

Ives reckons that at current prices, there’s a historical buying opportunity here. Because he believes that the company will see accelerating growth as its agentic AI offering, Agentforce, gains momentum with customers.

He expects revenue growth to rise from 8%-10% now to somewhere in the teens in the years ahead. He also believes that in the long run, Salesforce will be a core player in the AI revolution.

Note that his price target for the stock is currently $375. That’s more than 100% above the current share price.

An investment opportunity?

Is Salesforce worth a look at current levels? I think so. Recently, it’s been having a lot of success with its Agentforce platform. It’s still very early days here (it was only launched in late 2024) but in the long run, there’s huge potential.

As for the valuation, it’s really low at present. Currently, the forward-looking price-to-earnings (P/E) ratio is just 13.6.

Of course, AI does introduce some uncertainty for its existing customer relationship management (CRM) software. Some firms may opt to create their own products while AI-related job losses could lead to a reduction in the number of licenses that the company can sell.

However, with the stock down 50% and trading on a P/E ratio of 13.6, I like the risk/reward proposition. I feel it’s worthy of further research.

The post There’s a ‘historical’ buying opportunity in this S&P 500 stock, according to a top Wall Street analyst appeared first on The Motley Fool UK.

Looking for stocks that are oversold? Here are three worth checking out.

The definition of oversold

The technical definition of an oversold stock is one that has a ‘relative strength index’ or RSI of less than 30. The RSI is a technical analysis indicator that measures the magnitude of recent share price movements.

Now, one stock that fits the bill here is Salesforce (NYSE: CRM), which specialises in customer relationship management (CRM) solutions. Down 25% in a month, it currently has an RSI of 25.

Clearly, a lot of investors are worried that AI is going to disrupt this business. But could the fears here be overblown?

Personally, I think there’s a decent chance that Salesforce will continue to do well in the AI era. One reason I’m optimistic is that the company has launched a powerful AI agent service to help businesses automate their operations.

Note that analysts at Guinness Global Investors believe there’s clear evidence that AI momentum is growing. They point to the fact that six of the firm’s top 10 deals in the final quarter of 2025 were exclusively AI deployments.

So, I think this stock is worth a look right now. It’s certainly cheap – the forward-looking price-to-earnings (P/E) ratio is only 15.

Embedded in organisations globally

Another stock with a low RSI is ServiceNow (NYSE: NOW), which specialises in enterprise software. It’s also down about 25% in a month and sports an RSI of 29.

This is a stock I’ve had on my watchlist for a long time. I’ve never bought it though as it’s always been very expensive.

The set-up has changed dramatically recently, however. Today, the stock’s forward-looking P/E ratio is only 25 (falling to 21 using next year’s earnings forecast), so the valuation is now quite attractive.

One thing this company has going for it is that its software is really embedded in large businesses. Replacing it would be time consuming and costly.

Another is that it has launched agentic AI solutions. These should make its offering more valuable.

Of course, we can’t rule out AI disruption here. But on balance, I believe the stock is worth considering for a portfolio today after its huge fall.

Trading at a rock-bottom valuation

Finally, check out FactSet Research Systems (NYSE: FDS), which provides financial data to banks and investment managers. It currently has an RSI of just 19.

This stock is down about 30% in a month. Clearly, a lot of investors believe that FactSet’s offering is going to be less relevant in the AI era.

I’m not convinced the growth story is over, however. Because banks and investment managers aren’t going to blindly trust AI for their data (accuracy is vital).

It’s worth noting that earlier this year, FactSet signed a multi-year agreement with Barclays. This is designed to help Barclays deliver enhanced, data-driven solutions for its global client base.

Now, competition from rivals such as London Stock Exchange Group is a risk with this stock. However, with the P/E ratio now sitting at a very low 12, the risk-reward proposition looks attractive to me – I think it’s worthy of further research.

The post 3 oversold tech stocks in the S&P 500 index that are worth a closer look today appeared first on The Motley Fool UK.

According to Huang, falling software share prices are “the most illogical thing in the world”. So is this a once-in-a-generation buying opportunity for investors? 

Tools

Software stocks have been falling sharply over the last year. One example is Adobe, which is down 40% in the last 12 months.

The concern is that artificial intelligence (AI) is going to disrupt the business. But at an AI conference last week, Huang said:

“There’s this notion that the tool in the software industry is in decline, and will be replaced by AI. It is the most illogical thing in the world, and time will prove itself. If you were a human or a robot… would you use tools or reinvent tools? The answer, obviously, is to use tools.”

That sounds encouraging, but I’m unconvinced this gets at why software stocks have been selling off. The concern isn’t that they’re going away – it’s that they’re getting disrupted.

What’s the risk?

In Huang’s terms, the danger for companies like Salesforce (NYSE:CRM) isn’t that AI replaces screwdrivers. It’s that it uses the existing ones in a way that makes them much less valuable.

At the moment, humans need a user interface (UI) to manage customer relationships. But an AI agent doesn’t and that’s the problem the company’s currently trying to figure out.

If a customer uses a Claude plugin to automate tasks like logging calls or entering data, it doesn’t need a human. And that means it doesn’t need a UI, which is what drives Salesforce’s revenues. 

That doesn’t reduce the firm’s value to zero – the need for a database won’t go away. But if AI agents can use the existing back-end tools better than humans, there’s a significant problem.

How big is the risk?

The more optimistic case for software companies is based on the idea that AI might help humans use tools, rather than do it better than them. And Alphabet’s Gemini is a good example of this. 

Google’s managed the shift from online search to AI-based chatbots very well. Despite the rise of ChatGPT, the company’s moved quickly and launched its own products to compete. 

In some cases, I think this is a plausible outcome for software companies. If they develop their own AI products, they might well be able to retain customers.

Salesforce has shifted to an outcome-based pricing model, rather than a subscription-based one. That’s not ideal, but investors will be hoping it can help the firm remain indispensable.

What to do?

In terms of the AI threat, my sense is that not all software companies are the same. But the stock market’s largely treating them as similar – and I think that creates opportunities.

The risk isn’t that AI replaces tools, it’s that it uses the existing tools in ways that reduce the value of what the likes of Salesforce currently do. And that’s more realistic in some cases than others. 

As a result, I’m looking at businesses that have more specialised products, ideally in regulated industries. This, I suspect, provides a level of protection that more general applications don’t have.

The post Did Jensen Huang give the green light to buy software stocks? appeared first on The Motley Fool UK.

I actually think now could be a good time to consider buying some AI stocks. Here’s why.

This isn’t a bubble

To my mind, asset bubbles have two key features. One is a level of euphoria among investors. As a result of this euphoria, asset prices rise consistently, no matter the news or the valuations. The other is sky-high valuations. In a bubble, valuations are usually completely detached from fundamentals.

Now, looking at the AI space today, I don’t see euphoria. Sure, there’s investor enthusiasm (for what’s possibly the most disruptive technology of all time), but it isn’t euphoria.

Ultimately, we’re not seeing stocks shoot up indiscriminately. Right now, plenty of well-known AI stocks are well off their highs. AI infrastructure powerhouse Oracle, for example, is currently trading about 40% off its highs. It’s fallen on the back of concerns over debt and a lack of free cash flow.

So investors are discerning about their AI stock selections. This is the sign of a healthy market – not a bubble.

As for valuations, they’re high but they’re not outrageously so. Big Tech giants Microsoft, Alphabet and Amazon, for example, trade on price-to-earnings (P/E) ratios of between 25 and 30.

I’ll point out that there are a few stocks in the AI space that actually look pretty cheap. Nvidia, for example, is on a P/E ratio of 25 right now (despite the fact that analysts expect 60% earnings growth this year). Meanwhile, Salesforce (NYSE: CRM) is on 20. These are relatively low multiples.

AI opportunities today

It’s these lower valuations that lead me to believe it could actually be a good time to consider buying some AI stocks. Because there appears to be some value on offer right now.

Going back to Salesforce, I think there could be an opportunity here as we start 2026. It’s been having recent success with its agentic AI platform, Agentforce, but no one’s giving the company credit for it at the moment.

In December, Salesforce told investors it had 9,500 customers paying for Agentforce at the end of its Q3, up from 6,000 at the end of Q2. At the end of the period, annualised recurring revenue (ARR) from the technology was $500m, up 330% year on year.

Now, it’s worth pointing out that there are many companies developing agentic AI solutions today. So there’s no guarantee Salesforce will be a winner in the AI space in the long run.

One thing the company has going for it however, is that it holds a lot of data for its customers. This data provides the context for the agentic AI technology, making it far more valuable.

Looking at price targets for this stock, I’m not the only one who’s bullish here. Currently, the average price target is $325 – about 22% above the current share price. In light of this price target, I think the stock’s worth a closer look right now.

But it’s not the only AI stock that looks attractive to me as we start 2026.

The post Forget a bubble: why now could be a good time to consider buying AI growth shares for an ISA or SIPP appeared first on The Motley Fool UK.

AI agents

Let’s start with business software giant Salesforce (NYSE:CRM). This S&P 500 stock has had a decent little run recently, rising 15% in the past couple of weeks. Year to date, however, it’s still down 21%.

This reflects concerns that AI agents might disrupt its per-user software model. Put simply, if AI agents make human employees more efficient, companies may hire fewer people (or need fewer full-access licenses). Or they may build their own AI agents.

While this is a theoretical risk, it’s important to note that the company’s own AI agent platform (Agentforce) is gaining real momentum.

Agentforce’s annual recurring revenue (ARR) hit $540m in Q3. And it had over 9,500 paid deals in place, up 50% quarter on quarter, making it Salesforce’s fastest-growing product ever.

Over 50% of Agentforce deals came from existing customers, demonstrating the firm’s ability to cross-sell these AI products. Together with Data Cloud, it generated $1.4bn in ARR.

Crucially, management sees these offerings contributing towards its aim of at least $60bn in organic revenue by fiscal 2030 (up from $37.9bn in fiscal 2025).

My view here is that AI will bolster Salesforce’s offerings rather than render them obsolete. And with the stock trading at a cheap forward price-to-earnings (P/E) ratio of 20, I think it’s worth checking out.

The agentic enterprise is a new paradigm. Customers will…use Salesforce to be the platform for digital labour, for sales, for service, for marketing and the impact on the way we can monetise those relationships is exponential. It’s not linear growth. It’s exponential.
Miguel Milano, President and Chief Revenue Officer at Salesforce

Three digital businesses

The second growth stock is Sea Limited (NYSE:SE). This is the firm behind Shopee, which is Southeast Asia and Taiwan’s leading e-commerce app.

Shopee would be impressive enough, but Sea also owns gaming platform Garena, which has over 670m active users. Garena’s behind global smash-hit game Free Fire.

Meanwhile, fintech business Monee isn’t too shabby, generating nearly $1bn in revenue Q3. That represented 60.8% year-on-year growth.

Despite putting up solid numbers, Sea’s share price is down 35% since September, as investors worry about regional competition from the likes of JD.Com and TikTok.

To maintain market share, Shopee has been investing heavily in logistics, which is temporarily putting pressure on margins.

However, I think this dip is a strong buying opportunity to consider for three reasons. First, despite fierce competition, the company is still growing strongly. Its on course to drive a 33% increase in revenue this year, to over $22bn. And net profit is expected to surge 155% to around $2.2bn.

Second, the stock now looks good value. The price-to-sales ratio is 3.8, which is well below its historical average of 9 (dating back to 2017), while the forward P/E multiple for FY 2027 is 23.

For a company expected to grow sales and earnings at 30%+ moving forward, this looks like a potential bargain.

Finally, the e-commerce and fintech growth opportunity across fast-growing Southeast Asia is enormous. This makes Sea Limited one of several stocks I’m watching closely in 2026.

The post 2 top growth stocks to consider buying for an ISA in 2026 appeared first on The Motley Fool UK.

There are still opportunities in this area of the market, however. Here’s a look at a stock that analysts believe could rise 60%-70% over the next 12 months or so.

An AI stock that’s worth a closer look

The stock in focus today is Salesforce (NYSE: CRM). It’s one of the largest software businesses in the world.

Traditionally, it has specialised in customer relationship management (CRM) software. However, over the last year, it has been focused on developing an agentic AI (digital labour) platform for businesses called Agentforce.

Agentforce momentum

Now, earlier this week, Salesforce posted its earnings for the third quarter of its fiscal 2026 year. And they showed that the company’s AI solutions are really gaining traction with customers.

For the period, Agentforce annualised recurring revenue (ARR) surged 330% year on year to $500m. At the end of the period, the company had 9,500 customers paying for the service, up from 6,000 at the end of Q2.

Note that on the earnings call, CEO Marc Benioff discussed how existing customers are spending more on Agentforce. In Q3, 362 customers “refilled the tank” versus just three customers in Q1.

When combined with Data 360 (Salesforce’s data platform) revenue, ARR was $1.4bn, up 114% year on year. So, this area of the business is certainly growing quickly.

Our Agentforce and Data 360 products are the momentum drivers, hitting nearly $1.4bn in ARR—an explosive 114% year-over-year gain. We now have over 9,500 paid Agentforce deals and 3.2 trillion tokens processed, underscoring our leadership in building the Agentic Enterprise and driving real outcomes.
Salesforce CEO Marc Benioff

Full-year guidance raised

Zooming out and looking at overall results, total revenue for the quarter was $10.3bn, up 9% year on year. Adjusted earnings per share was $3.25, up 35% year on year and well ahead of the consensus forecast of $2.86.

On the back of this performance, the company raised its full-year guidance. It now expects revenue of $41.45bn to $41.55bn (versus previous guidance of $41.1bn to $41.3bn), up 9%-10% year on year.

Analysts see a lot of potential

Since the Q3 earnings, analysts have been adjusting their price targets for Salesforce stock. Currently, many firms have price targets of $400, which is about 60% higher than today’s share price. The highest target is from investment bank Citizens. It believes Salesforce shares can hit $430 – about 70% higher than the current share price.

My view

Of course, analysts’ price targets need to be taken with a grain of salt. Often, they don’t come to fruition.

There are certainly a few risks that could derail the bullish investment thesis. These include disruption to its core business from AI, competition from other agentic AI solutions, and general economic weakness (which could reduce spending on technology).

I’m quite bullish on this AI stock, however. Personally, I believe it’s worth a look at current prices as the price-to-earnings (P/E) ratio is very reasonable at around 19.

That said, it’s not the only opportunity I see in the market at present. Right now, there are quite a few stocks that look attractive to me.

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Could ChatGPT help us find the next multibagger? I put it to the test by asking it for five shares that could be the ‘next Rolls-Royce’…

Rolls-Royce’s huge gains

Before I list ChatGPT’s stock picks, it’s worth looking at how Rolls-Royce managed to generate such huge returns for investors in the space of three years. Ultimately, several factors led to the gains.

First, the stock was well and truly out of favour three years ago and the share price was at rock-bottom levels (below £1). This can’t be ignored – it started from a very low base.

Second, the company’s performance was shocking back in 2022 (it was losing money hand over fist), partly due to Covid. Since then, CEO Tufan Erginbilgiç – who came in at the start of 2023 – has managed to increase profitability levels significantly, helped by a rebound in the civil aviation market.

Third, the company has become more diversified, moving into new areas such as small modular reactors (SMRs). This has excited investors and lifted the valuation to high levels.

ChatGPT’s picks

Given this background, I was a little surprised by ChatGPT’s picks. They were:

• Babcock
• RTX
• Hexcel
• Boeing
• Salesforce (NYSE: CRM)

Defence stocks Babcock and RTX have had huge runs recently and are currently trading near all-time highs. So, I highly doubt they’re going to be the next Rolls-Royce!

Turning to Hexcel, which supplies advanced composite materials to aircraft manufacturers, I can’t see it being a major multibagger in the next few years. It recently lowered its 2025 profit forecast due to tariff uncertainty.

Aerospace giant Boeing is more interesting – it’s out of favour right now and trading well below its highs. It’s also facing some operational issues.

I’d be very surprised if the stock was able to generate explosive gains over the next few years, though. With this company, there always seems to be problems with its planes (it just took a $4.9bn hit due to delays with its 777X jets).

Could this stock deliver huge gains?

That leaves us with software company Salesforce. Out of the five, I probably see the most similarities with Rolls-Royce here.

For starters, it’s hated right now, just like Rolls-Royce was three years ago. It hasn’t tanked in the same way that the Footsie stock did but it is about 30% off its highs.

Second, its performance hasn’t been great recently. Earlier in the year, for example, the company posted its lowest revenue growth ever.

Third, the company is making major moves to boost profitability. For instance, it recently announced the layoff of 4,000 employees.

Finally, the company is expanding into new areas. Specifically, it’s expanding into artificial intelligence via its agentic AI solution, Agentforce, which can boost efficiency in a wide range of different industries.

Now, if I’m honest, I don’t expect Salesforce to generate the kind of returns that Rolls-Royce did over the next three years. But I do believe there’s potential for attractive returns, so the stock could be worth considering.

An economic slowdown is a risk. This software company is economically sensitive.

With it trading on a forward-looking price-to-earnings (P/E) ratio of 21, however, I like the risk/reward proposition.

The post I asked ChatGPT for the ‘next Rolls-Royce’ and here are 5 shares it gave me… appeared first on The Motley Fool UK.

However, some stocks haven’t performed so well, even though they’re well exposed to AI. In some instances this is because the market perceive AI to be a threat to their businesses.

So, today I wanted to look at two stocks that have pulled back over the past 12 months despite having important roles to play in the delivery of AI.

Salesforce

Salesforce (NYSE:CRM) is a leader in enterprise solutions. While this traditional enterprise solutions business has been slowing, there’s reason to get excited by its Agentforce operations.

Agentforce is a platform for creating and deploying specialised AI agents that automate tasks and workflows across a business. It uses generative AI to handle tasks, provide natural language responses, and make decisions grounded in a company’s specific data.

What’s more, Salesforce has a huge existing client-base, endless data, and some of the best software engineers around.

While some risks remain, especially the notion that an even bigger player could dominate with unmatched software — Microsoft ,for example — the stock’s valuation is undemanding.

It currently trades around 22 times forward earnings (P/E) and has a price-to-earnings-to-growth (PEG) ratio of 1.3. This is a 25% discount to the information technology sector average.

Analysts agree with this interpretation too with the average share price target being 28% above today’s price. That’s a decent sign of value. It’s definitely worth considering. It’s down 13% over the past 12 months.

Adobe

Adobe (NASDAQ:ADBE) shares are down 30% over the past 12 months. Clearly not a good return.

The concern is that programmes like OpenAI’s Sora 2 could undermine Adobe’s dominance in creative software by automating tasks that once required its flagship products.

Sora 2’s ability to generate photorealistic videos from text prompts, for instance, could threaten demand for Adobe’s tools like Premiere Pro and After Effects.

However, CEO Shantanu Narayen believes the market is mispricing the company. He recently told Bloomberg that investors have been overly focused on chipmakers and AI infrastructure providers, overlooking software firms that actually deliver AI-driven capabilities to end users. This is where Adobe, with a large existing client base, can excel.

Narayen argued that Adobe is “certainly undervalued right now,” highlighting the company’s profitability, growth prospects, and ongoing share buybacks as signs of confidence.

That confidence appears supported by the numbers. Adobe trades at a forward P/E of 16.3 — roughly 36% below the sector median and nearly 48% below its five-year average. Its forward PEG ratio of 1.14 is also a considerable (35%) discount to the sector.

Analysts consensus also suggests the stock is undervalued by 37%. That’s really noteworthy in the current, hot market.

While its momentum is poor and the market will need a catalyst to correct that, I believe Adobe is worth considering — or putting on the watchlist.

The post Down 13% and 30%, these US stocks could dominate AI delivery appeared first on The Motley Fool UK.

Artificial intelligence (AI) is creating huge opportunities, but it’s also threatening a number of established businesses. With that in mind, I’m looking to be careful with my investing.

Brown & Brown

Shares in insurance broker Brown & Brown (NYSE:BRO) fell 6% on Tuesday (28 October) after the firm’s earnings report. And looking at the results, I think I can see why.

Organic revenue growth of 3.5% was the weakest it’s been in some time. This was largely due to an unusually competitive insurance market, which the company can’t do anything about. 

While the past isn’t a guarantee of the future, history tells us that these environments don’t tend to last for too long. And I’m looking to use this as an opportunity to buy the stock. 

I’m really impressed by Brown & Brown as a company. It combines economies of scale with the benefits of local expertise and it operates in a market that’s undergoing consolidation.

I think that means there’s significant scope for growth, both through higher margins and via acquisitions. And the firm is in the process of working through a deal worth almost $10bn.

A deal of that size inevitably brings integration risk and they’ve paid a high multiple for it. But I’m excited to have the opportunity to buy the stock at a price below $85.

Salesforce

Analysts have pretty optimistic views of Salesforce (NYSE:CRM) at the moment. But I’m extremely wary about what AI means for the future of the company’s business. 

The firm’s Agentforce platform allows customers to build and deploy their own autonomous AI agents. And it’s saving Salesforce money in the form of 4,000 fewer customer support staff. 

The trouble is, I think it’s also likely to stunt the company’s growth. Specifically, I suspect AI is going to mean other businesses are in a position to build their own AI agents themselves.

Salesforce’s key competitive strength has been its switching costs. And I don’t expect those to disappear, which should give the company the ability to generate growth by raising prices. 

The firm’s ability to do this, though, is going to be limited if customers can do something similar at a lower cost elsewhere. And this is showing up in estimates of future earnings.

Analysts expect earnings per share to grow at 9% a year up to 2028. That’s not intrinsically terrible, but I don’t think it justifies me buying the stock at a price-to-earnings (P/E) ratio of 37.

Opportunities and threats

As an investor, I want to own shares in companies that are going to be worth more in the future. And that means ones that are going to be able to grow their earnings for a long time. 

I think Brown & Brown fits the bill and I currently hold it. A fragmented US middle market should bring growth opportunities in the future and makes short-term weakness a buying opportunity for me.

With Salesforce, the story is different. The rise of AI looks like a threat to its competitive position and growth prospects, which is why I think I have better opportunities elsewhere.

The post Growth stocks: 1 I’m buying in November and 1 I’m staying well away from appeared first on The Motley Fool UK.