Jeff Smith of Starboard Value calls artificial intelligence an important technological advancement similar to the internet and says many companies will benefit from this huge trend. “AI is a huge opportunity,” Smith said on CNBC’s “Squawk on the Street” on Tuesday. “There have been a few technological advancements over the past 20 years that have made it possible. The internet is the starting point… maybe you talk about blockchain and then you can talk about AI.” AI has dominated the headlines this year, creating a buying frenzy on Wall Street that pushes chipmaker Nvidia past a $1 trillion market cap. Lively chatbot ChatGPT, capable of taking written input from users and generating human-like responses, is an instant global phenomenon, becoming the fastest growing software in history. “I believe technology will continue to evolve,” Smith said. “I believe it will do two things. It will make companies more efficient. It will also increase demand for products for companies that do the right thing.” Smith said AI is a “huge opportunity” for Salesforce, the software company in which he took an activist stake in 2022. Salesforce’s stock has risen more than 70% this year. Smith said of Salesforce: “What they’ve done is pretty impressive. I mean, they’ve increased their margins by 800 basis points. Revenue growth has slowed a bit, which was expected.” The hedge fund manager says there’s more room for Salesforce to grow, and the stock could rise another 30%. “We think free cash flow could be $15 a share over the next few years. We think that means the stock has to be over $300 a share. It’s still undervalued,” Smith said. “There’s still work to be done and I think they’ll agree.” Smith said he’s also optimistic about the software name Splunk, which he says is a bit behind Salesforce in terms of execution. “It’s the same opportunity when a company that previously didn’t focus on margins but instead focused on growth, and now they focus on the right balance between revenue growth and profitability,” Smith said. “With that focus, we really think they could nearly double their free cash flow per share over the next few years.” Shares of Splunk are up more than 20% this year. Smith spun off his New York-based hedge fund from investment firm Ramius in 2011.