Good morning,
A Curry-Buffett meal is pricey, and we’re not talking about all-you-can-eat Indian: the winner of an eBay charity auction paid $9M for a private lunch with Steph Curry and Warren Buffett.
It’s another big week for markets. On Thursday, we’ll get first-quarter GDP and April PCE. If the Fed’s favorite inflation gauge comes in hot, we’ll see higher odds of a rate hike at the central bank’s June 17 meeting — the first helmed by Chair Kevin Warsh. In today’s letter:
Salesforce earnings highlight still-sticky SaaS seats
The AI upgrade cycle is shrinking fast
Consumer sentiment vs. investor sentiment
LEADING STORY
Salesforce reports earnings as companies layer AI workflows over SaaS systems of record
Cloudy with a chance of sales calls…. Salesforce is set to report after market close today, and amid SaaSpocalypse jitters, investors will be looking for insights into the health of LinkedIn’s favorite acronym: B2B SaaS. Snowflake, Asana, Okta, and other software mainstays also report this week. Salesforce stock is down ~30% this year, and it’s not alone: in Q1, software sector stocks had their biggest quarterly drop since 2008 over worries that AI will replace many enterprise SaaS uses. Ramp Rate data tells a different story:
The seat is sticky: Salesforce holds 76% adoption in the CRM category, up 3 percentage points year-over-year. Compare that to AI-native CRM upstart Attio’s 4% adoption, up 2 percentage points YoY. Salesforce is also the most switched-to vendor, with 60% first-time adopter share.
Systems of record at records: Salesforce reported record Q4 results and a handy earnings beat in February, even as businesses' monthly AI spend quadrupled from February 2025 to February 2026.
For traditional SaaS vendors, the share of seat-based revenue has increased, rising from 65% in April 2025 to 76% in February of this year, Ramp Rate data shows. Consumption-based revenue is roughly flat.
On the seat-level, incumbents including Salesforce, Snowflake, Adobe, Figma, and GitHub are winning in their respective categories: Salesforce’s adoption share is rising even faster than that of an AI-native CRM competitor. While incumbents are holding the system of record, several AI-natives are seeing breakout growth in adjacent workflow layers and entirely new categories.
In the sales execution & orchestration category, a layer that sits on top of the CRM, AI sales meeting-notes app Granola went from virtually zero to 24% category adoption in roughly two years. And in sales data providers, Apollo.io and Clay are growing fast, starting to close the adoption gap with leader LinkedIn Sales Navigator.
It isn’t just sales software: Ramp data shows that 5 of the 6 fastest-growing software vendors over the past three months are AI-native tools.
The bottom line:
Software’s future is more layered than apocalyptic. While incumbents are holding and growing seats, AI-natives are spiking in workflows layered above systems of record. The SaaS layer cake will only get thicker as AI changes how work gets done and new categories emerge (think: AI notetaking, AI coding, answer engine optimization). Of course, the best position is to capture both the system and the workflow layer. That could be why Salesforce has announced about a dozen acquisitions in the past year — most recently, of AI-native Momentum.
Token Spend Intelligence
Enterprise AI buyers are upgrading faster than ever to OpenAI and Anthropic’s new models.
The median new model now reaches half of its vendor's customer base in just 15 days, down from 20 days in 2024, according to Ramp AI Token Spend Management data.
The "wait and see" period after a frontier model launch has been compressed by a full work week, with finance and ops teams quickly greenlighting the swap to the latest GPT or Claude variant.
These aren't treated as software deployments with procurement cycles, learning curves, and change management. They're near-instant upgrades, swapped in by businesses the way consumers update their operating systems.
For OpenAI and Anthropic, that's a double-edged sword: launches translate into revenue and feedback almost immediately, but the same ease that pulls customers onto a new model can pull them off it just as quickly when a competitor ships next.
Release Radar: the split screen economy
The stock market is sipping Aperol Spritzes on a sailboat in Greece while consumer sentiment is eating canned beans on the couch.
The University of Michigan's consumer sentiment index fell to the lowest level ever recorded in May as inflation fears heated up, driven by high gas prices.
Spending appears to be holding up, but the fine print is shakier: despite a nominal increase, April retail sales actually fell 0.2% month-over-month when adjusted for inflation.
Meanwhile, the S&P 500 is up 10% this year and earnings are outperforming. Of the 95% of S&P 500 companies that have reported earnings so far, 84% have posted an earnings beat.
FactSet data shows that the index is on track to post an earnings growth rate of 28.4%, the highest since Q4 2021.
Signals Shortlist
The risk premium for holding stocks over bonds is vanishing (The Wall Street Journal)
🗓️ Leading Events:
Wednesday, May 27: Earnings expected from Salesforce, Snowflake, Marvell Technology, HP, Dick’s Sporting Goods, Pindoudou, Abercrombie & Fitch, and Braze
Thursday, May 28: April PCE. Q1 GDP. Initial jobless claims. Earnings expected from MongoDB, Okta, Asana, Dell, Best Buy, Kohl’s, Hormel Foods, Xpeng, Li Auto, Costco, SentinelOne, and American Eagle Outfitters
Friday, May 29: Not much ¯\_(ツ)_/¯
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