Why Burke Wealth Sold Salesforce (CRM) After Its 20% Post-Earnings Rally

Burke Wealth Management, an investment management company, released its "Focused Growth Strategy" Q3 2026 investor letter. A copy of the letter can be downloaded here. The fund delivered strong results in the third quarter of 2026, benefiting from a sharp recovery in enterprise software and solid corporate earnings amid continued market volatility. The composite returned 10.8% net of fees, substantially outperforming the S&P 500 Total Return Index's 2.3% gain, while its year-to-date return reached 20.0%, compared with 12.7% for the benchmark. The firm attributed the quarter's strength partly to investors reassessing the long-term value of enterprise software platforms that can securely connect AI models with proprietary business data. Burke believes these platforms can serve as essential AI "harnesses," providing permissions, security, and context for enterprise applications, although it cautions that AI agents could challenge traditional software business models and seat-based pricing. Looking ahead, Burke remains optimistic about the remainder of 2026, citing strong corporate earnings growth and the transition from AI infrastructure investment toward practical applications that may improve productivity and consumer experiences. In addition, please check the Fund's top five holdings to know its best picks in 2026.

In its second-quarter 2026 investor letter, Burke Wealth Focused Growth Strategy highlighted stocks like Salesforce, Inc. (NYSE:CRM). Salesforce, Inc. (NYSE:CRM) provides cloud-based customer relationship management software and enterprise applications, including AI-powered tools for sales, service, and marketing teams. The one-month return of Salesforce, Inc. (NYSE:CRM) was 7.22% while its shares traded between $146.32 and $269.11 over the last 52 weeks. On October 23, 2026, Salesforce, Inc. (NYSE:CRM) stock closed at approximately $248.57 per share, with a market capitalization of about $209.09 billion.

Burke Wealth Focused Growth Strategy stated the following regarding Salesforce, Inc. (NYSE:CRM) in its Q3 2026 investor letter

The pain came to a crescendo during the first quarter of 2026 when Salesforce, Inc. (NYSE:CRM) was down 30% (Click Here To Read The Letter In Detail).

Salesforce, Inc. (NYSE:CRM) is in 25th position on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. As per our database, 99 hedge fund portfolios held Salesforce, Inc. (NYSE:CRM) at the end of the second quarter, which was 101 in the previous quarter. While we acknowledge the risk and potential of Salesforce, Inc. (NYSE:CRM) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Salesforce, Inc. (NYSE:CRM) and shared our thoughts on the company. In addition, please check out our hedge fund investor letters Q3 2026 page for more investor letters from hedge funds and other leading investors.

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This article is originally published at Insider Monkey.