Salesforce's $25 billion buyback masks the SaaS debt trap

The article frames a debate last week about whether AI is slowing down as the wrong debate. While the market argued over data-center bubbles, the author points to a different bubble: the SaaS debt trap. When multiples collapsed — the SaaS index fell 6.5% in 2025 while the S&P 500 rose 17.6%, and median SaaS revenue multiples dropped from 18x in 2021 to about 3x — the incumbents took on record debt, bought back their own stock, and dressed it up as an AI strategy.

Salesforce ran the most extreme version. It entered March with $7.3 billion in cash, but management chose to borrow anyway, issuing $25 billion in senior unsecured notes with maturities running to 2066. Senior notes on the balance sheet went from $8.5 billion to $33.3 billion in one quarter. Adobe executed $23.3 billion in buybacks at an average price around $412, but the stock closed at $250 — retiring capital at prices 65% above where the market is bidding today. The author argues that if Benioff believed Agentforce would reaccelerate the business, he would have kept the powder dry and spent it on a proprietary model or a lab-scale strategic stake.

Buyer behavior underneath the earnings prints is shifting. A regulated health insurer canceled its $600,000 Salesforce contract and rebuilt in two months. Three law firms committed $1.5 billion combined to build their own AI, while zero public SaaS companies have. Private equity and venture capital firms are buying the industries software companies used to sell into. The author says the replacement is running ahead of the coverage, and the market is paying attention to earnings prints while missing what is happening underneath them. Whether the incumbents can convert their reported growth into a credible AI strategy — rather than a stock-price management program — is likely to determine whether the debt trap snaps or holds.