Shares of Salesforce rallied Friday as Wall Street bets that activist pressure may again help revive an otherwise dragging stock. Jeff Smith’s Starboard Value increased its stake in Salesforce by 47% during the second quarter, according to a securities filing , ending the month of June with a position worth $341.5 million. Starboard also added to its Salesforce holdings in the first quarter. The market is taking note Friday, sending shares up 4%, because Starboard was the first activist hedge fund to start publicly pushing for changes at Salesforce in late 2022 and into 2023. Multiple other activist firms swarmed around Salesforce and echoed Starboard’s calls for greater efficiency and profitability, among other demands. It proved to be a wildly successful activist campaign, with shares of Salesforce almost doubling in 2023 after losing nearly half their value in 2022. Starboard had sold down a large chunk of its stake before beginning to buy this year. Starboard’s increased stake in Salesforce could once more positively influence the company’s direction, according to D.A. Davidson analysts led by Gil Luria. “We believe this is a signal there will be another round of investor activism and increased pressure on management to refocus on growth of the core business, additional margin expansion, and hold off on dilutive M & A,” Luria wrote to clients Friday. In the same note, D.A. Davidson upgraded the stock to a hold-equivalent rating from sell, arguing the company’s challenges have been appropriately priced in. Indeed, Salesforce entered Friday having lost more than a third of its value after closing at a record of $368 a share on Dec. 4. CRM 1Y mountain Salesforce’s stock performance over the past 12 months. Among Salesforce’s issues is a belief that artificial intelligence is threatening the business model of enterprise software companies that count on their customers growing their headcount, thereby paying for more software licenses. It’s often called the seat-based model, and earlier this week, its perceived shortcomings in the generative AI era was the subject of a note from Melius Research. There is “some truth” to Melius Research’s idea that AI is eating software, Jim Cramer acknowledged during the August Monthly Meeting on Thursday. At the same time, the Club hasn’t been ready to cut bait on its long-held position in the stock. Starboard’s intentions this time around aren’t clear — the firm didn’t respond to CNBC’s request for comment — but its maneuvering nevertheless represents a glimmer of hope. In October 2024, Smith of Starboard complimented Salesforce’s profitability improvements but said he still believed “there’s a lot more to go.” “If they execute on this plan, the stock could turn around in the same way it did last time Starboard helped CRM steer the ship,” D.A. Davidson’s Luria wrote to CNBC in an email Friday. Luria kept his price target unchanged at $225 a share, which is below where the stock is trading Friday. Luria had been among those on the Street worried that Salesforce was neglecting its core business for a premature bet on Agentforce, its agentic AI product suite. It was at the heart of D.A. Davidson’s decision in April to initially downgrade Salesforce to a sell rating. Jim disagreed with the sentiment at the time, saying he believed CEO Marc Benioff was backing Agentforce because the Salesforce’s core business was performing in line with expectations. That wasn’t the last of Salesforce’s woes. Its decision in late May to buy data management firm Informatica for $8 billion faced some skepticism, and its quarterly results released around the same time failed to quiet the doubters. RBC Capital Markets analysts, for example, downgraded the stock and expressed concerns that Benioff was slipping back into his old habit of relying on acquisitions to stoke topline growth — a big topic of conversation during the activist battle of 2022-23. At the time, Jim pushed back on the notion that Salesforce was out of innovative ideas and lent support to Benioff’s Agentforce push. Salesforce said in May that Agentforce generates over $100 million in annual recurring revenue and has secured 8,000 deals since its launch last fall, with half of them being paid deals. The Club recognizes that Salesforce has been painful to own lately. “I keep coming back to the fact that [Benioff] says business is really strong,” said Jim when asked by a Club member about Salesforce during the August Monthly Meeting. And yet, the stock chart is ugly. “What happens when [business is] not strong?” Jim asked rhetorically. A few important events loom that will help shape our thinking. On Sept. 3, Salesforce reports its fiscal 2026 second quarter. Then, in mid-October, its annual Dreamforce conference is on the schedule. “We have to make a decision around” Salesforce by the time of Dreamforce, Jim said. (Jim Cramer’s Charitable Trust is long CRM. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. 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