This beaten-up S&P 500 stock reminds me of Rolls-Royce shares in 2022…

Back in 2022, Rolls-Royce shares were deeply out of favour with investors. And for good reason – the company was really struggling.

Rolls-Royce has been able to turn things around, though. And as a result, anyone who was brave enough to buy the shares when they were down in the dumps has done incredibly well (the shares have risen more than 10-fold since the start of 2023).

Are there any turnaround opportunities like this in the market today? Absolutely.

Here’s a look at an S&P 500 stock that reminds me a little of Rolls-Royce in 2022.

This stock is hated

The stock in focus today is Salesforce (NYSE: CRM). It’s the largest customer relationship management software company in the world.

Right now, this stock is absolutely hated. This is because Salesforce’s revenue growth is underwhelming at present and investors are concerned that AI is going to destroy its business model.

Like Rolls-Royce in 2022, it has literally been left for dead. While other tech stocks have soared this year, Salesforce is down around 25%.

But zooming in on the business, there are signs that performance is picking up.This company isn’t exactly sitting still and letting AI eat its lunch…

Making progress quietly

Around a year ago, Salesforce launched an AI agent solution to help businesses be more productive. Fast-forward to today and it’s now having quite a bit of success with it.

Known as Agentforce 360, this platform connects humans and AI agents in one trusted system, empowering every company to operate with unprecedented intelligence and speed. It can be used across every business function (sales, service, marketing, etc.) and it has some really cool features, such as the ability to create analytics dashboards from natural language text (i.e., no coding needed).

Today, there are 12,000 businesses globally using Agentforce 360. And last quarter (ended 31 July), the company generated $440m of annual recurring revenue from agentic AI.

I think this is just the beginning, though. At Salesforce’s annual conference Dreamforce 2025 last week, several big companies (e.g., Pandora, Williams Sonoma, PepsiCo) raved about Agentforce 360’s results, which leads me to believe that many more companies are going to give it a go.

It’s worth noting that as a result of recent success here, the company raised its 2030 revenue guidance to $60bn (58% growth from the figure last financial year) and announced a $7bn share buyback. Analysts at JP Morgan – who have a $365 price target on the stock – commented that the buyback signals confidence in Salesforce’s revenue and free cash flow strength.

Worth a look today

Now, I’m not saying that this stock is going to be a ‘10-bagger’ in three years like Rolls-Royce. But I do think it has potential (and is worth considering).

Currently, it trades on a forward-looking price-to-earnings (P/E) ratio of just 20. That’s really low for a world-class software company.

There are still a lot of doubters today (AI is a risk to software businesses like Salesforce, to be fair). But there were also a lot of doubters when Tufan Erginbilgiç took over at Rolls-Royce in 2023 and the company started seeing some good results…

The post This beaten-up S&P 500 stock reminds me of Rolls-Royce shares in 2022… appeared first on The Motley Fool UK.

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Edward Sheldon has positions in Salesforce. The Motley Fool UK has recommended Rolls-Royce Plc and Salesforce. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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