Been sitting on the sidelines with Salesforce and honestly, I'm still not convinced it's a buy even with earnings coming up. Yeah, the stock could pop if numbers beat expectations, but there's something that keeps nagging at me about this one.

First off, the compensation situation is wild. In their latest quarter, we're talking $805 million in stock-based comp on roughly $10.3 billion in revenue. That's about 8% of quarterly revenue just going to employee stock. For context, Alphabet - which is actually growing faster - sits around 6%. Sure, the company can afford it and they're buying back shares aggressively ($3.8 billion in Q3 alone), but that's still shareholder money being diluted over time. When a stock isn't growing at the explosive rates we saw years ago, that kind of equity burn starts to matter more.

The revenue growth has cooled into high single digits, which is fine for a mature company, but it changes how I think about valuation. At a P/E around 24, it doesn't scream "cheap" to me, especially given what's coming next.

Then there's the AI wildcard. Salesforce is pushing hard into this space - Agentforce and their AI products are doing well on paper. ARR hit $1.4 billion up 114% year-over-year, and they're processing 3.2 trillion tokens through their LLM gateway. Impressive numbers. But here's the thing: AI is a double-edged sword for profit margins. Yeah, it might drive more demand, but it also creates new costs, invites tougher competition, and gives larger competitors easier ways to bundle features and close gaps. That's margin compression waiting to happen.

The uncertainty is what gets me. I want to see what "steady state" actually looks like for this stock once AI becomes truly embedded in the platform. Without that clarity, I'm not paying up.

Could I miss out if they crush earnings Wednesday? Maybe. But I'd rather wait for either more clarity on margins or a better entry point. Sometimes the best trade is the one you don't make.