10 Best SaaS Stocks To Buy Now

1. Salesforce, Inc. (NYSE:CRM)

Number of Hedge Fund Investors In Q1 2024: 154

YTD Return: -11.7%

Salesforce, Inc. (NYSE:CRM) provides customer relationship management software. The firm’s shares tanked by 20% in May, for the worst drop in two decades after its earnings report for the first quarter hit the wires. The results saw Salesforce, Inc. (NYSE:CRM) post $9.13 billion in revenue, which fell short of analyst estimates of $9.17 billion. As if this weren’t enough, Salesforce, Inc. (NYSE:CRM)’s guidance for the current quarter also fell short of analyst estimates. While the analysts were expecting the firm to guide $9.37 billion in revenue and $2.40 in earnings, Salesforce, Inc. (NYSE:CRM)’s high end guidance of $9.25 billion in revenue and $2.36 in earnings fell short by a wide margin. Following the historic earnings, Oppenheimer remained optimistic as it kept an Outperform rating and a $280 share price target for Salesforce, Inc. (NYSE:CRM)’s shares. The optimism was based on Oppenheimer’s assessment of Salesforce, Inc. (NYSE:CRM)’s executives’ plans to monetize its generative AI products and its strong position in the market due to a solid customer base.

The average of 42 one year analyst share price targets for Salesforce, Inc. (NYSE:CRM) is $296.04. This marks a 27.6% upside over the recent closing price of $231.94. Salesforce, Inc. (NYSE:CRM)’s three year annualized revenue growth rate is 17.93%. Vulcan Value Partners mentioned the firm in its Q1 2024 investor letter. Here is what the firm said:

Salesforce is the world’s leading SaaS vendor for customer relationship management (CRM) and salesforce automation (SFA) software. Free cash flow for FY2024 came in significantly better than expected, and Salesforce guided free cash flow growth to again be very strong in FY2025. The company also pointed to several things with the potential to accelerate future growth including pricing, artificial intelligence, and a better buying environment.

While CRM is one of the top SaaS stocks on the hedge fund radar, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than AMD but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None.