Bill Nygren, portfolio manager of Harris Oakmark Funds, said Salesforce remains a growth opportunity despite its current market valuation.

Nygren's assessment comes at a time when investors are scrutinizing the long-term scalability of software companies integrating artificial intelligence. His confidence suggests that the company's financial fundamentals may be stronger than the current stock price reflects.

Speaking from the trading floor of the Cboe exchange on Thursday, Nygren said, "We don't think they're done growing" [1]. He pointed to the company's ability to leverage AI as a primary driver for future expansion [1].

Financial metrics are central to Nygren's bullish outlook. He said that Salesforce is trading at a double-digit free cash flow yield [1]. This metric indicates a high level of cash generation relative to the company's market value [1].

Beyond organic growth, Nygren highlighted a shift in how the company manages its capital. He said the company is now redirecting cash flow to purchase shares [2]. This move typically signals that a company believes its own stock is undervalued, providing a potential catalyst for price recovery.

Nygren's strategy focuses on finding "beaten-down" companies with strong fundamentals [1]. By prioritizing cash flow and AI potential, he argues that Salesforce is positioned for a significant upside [1, 2].

“"We don't think they're done growing."”

This perspective highlights a divergence between short-term market sentiment and long-term value investing. By focusing on free cash flow yield and share repurchases, Nygren is signaling that the company's internal financial health may outweigh the volatility associated with the AI transition in the software sector.