6. Salesforce Inc (NYSE:CRM)
Number of Hedge Fund Holders: 154
Salesforce Inc (NYSE:CRM) is a prominent AI story and a leading cloud provider, contributing to its ranking on our list. The cloud provider is on its way to becoming an AI powerhouse. The company’s AI cloud platform can support any large language model and is built on the Einstein GPT Trust Layer. Key AI products by the company include Sales AI, Customer Service AI, Marketing AI, and Commerce AI. In a recent development, MuleSoft, Salesforce’s software company that provides integration software to connect data and applications, launched AsyncAPI which is capable of building AI-powered customer experiences in real-time. The launch will facilitate the widespread adoption of event-driven architectures, allowing businesses to respond to real-time events faster.
Overall, the company is now responsible for 250 petabytes of data for its customers, crucial to the AI transition. The company’s Data Cloud is rapidly growing to become its next $1 billion cloud. Data Cloud streamlines AI insights and actions for its customers. Salesforce Inc (NYSE:CRM) claims that this is its first step to becoming an AI enterprise and is expecting a major tailwind in revenue due to AI adoption.
Overall, at the close of Q1 2024, 154 investors were bullish on the stock, with total stakes amounting to $16.62 billion. Of those, Ken Fisher’s Fisher Asset Management was the highest stakeholder with a position of $3.27 billion.
CRM is a Wall Street favorite. Its median price forecast represents an upside of 15% from current levels.
Here are some comments about Salesforce from Harding Loevner’s Q1 2024 investor letter:
“Leading software companies have the advantage of high switching costs and the ability to incorporate new features into products customers already use. For example, Microsoft has added its Copilot chatbot functionality to everything from search (Bing Chat, recently renamed to just Copilot) to coding (GitHub Copilot) and workplace applications (Copilot for Microsoft 365). Software sold by Microsoft and other companies such as Salesforce, Inc. (NYSE:CRM), SAP, and ServiceNow are also already deeply integrated into their customers’ operations and workflow.
As large enterprises search for the right balance, Salesforce’s Data Cloud, a flagship offering, is designed to address a critical issue for them so they can make better use of AI tools. After a hectic buildout over the last few years of “data warehouses” and “data lakes”—two types of repositories for storing and processing data—across the various business units of large companies, many companies are left with what feels like islands of trapped data. Data Cloud solves this by creating a single platform to access and leverage all of an enterprise’s data, eliminating the need to constantly duplicate large amounts of information across different platforms. Users are then able to apply generative-AI technology, such as Salesforce’s Einstein tool, to a more comprehensive dataset, which enables them to better glean customers’ intentions, personalize marketing messages, and automate the processing of customer-service requests. As users build these systems, Einstein’s copiloting functionality helps their programmers work more efficiently so that IT departments with limited budgets and manpower can still develop the necessary tools. Salesforce’s management projects that revenue and earnings will climb about 9% and 45%, respectively, in fiscal 2025, citing the company’s operating leverage and cost discipline. We think these figures are achievable given the renewed focus on profitable growth, and so we added to the stock during the quarter.”
