Goldman Sachs’ Best Hedge Fund Stock Picks: Top 20 Stocks

17. Salesforce, Inc. (NYSE:CRM)

Number of Hedge Fund Investors in Q2 2024: 117

GS’ Number Of Funds: 15

Salesforce, Inc. (NYSE:CRM) is a sizeable SaaS company that focuses on providing customer relationship management products and software to businesses. It is one of the biggest firms of its kind, which means that as Salesforce, Inc. (NYSE:CRM)’s $35.7 billion in trailing twelve month revenue leaves little room for growth, investors focus on customer retention, revenue per customer, and cost control as the benchmarks for growth. There is a key bifurcation in the SaaS industry right now where firms that have implemented AI into their product stack are being rewarded handsomely while others are struggling. Salesforce, Inc. (NYSE:CRM) is among the former group, and it is using its vast customer base to manage a whopping 250 petabytes of data. Salesforce, Inc. (NYSE:CRM)’s leading AI product is its Data Cloud, which utilizes 8 trillion data points to improve customer relationship management. Despite its scale, analysts have flagged Salesforce, Inc. (NYSE:CRM)’s inability to land large deals which can constrain its margins and make it struggle in an era where SaaS shifts from per seat to consumption driven models.

Salesforce, Inc. (NYSE:CRM)’s management believes that Data Cloud can help it land big deals. Here’s what it said during the Q1 2025 earnings call:

“Data Cloud gives every company a single source of truth and you can securely power AI insights and actions across the entire Customer 360.

Now let me tell you why I’m excited about Data Cloud and why it’s transforming our customers and how it’s preparing them for this next generation of artificial intelligence. Data Cloud was included in 25% of our $1 million plus deals in the quarter. We added more than 1,000 data cloud customers for the second quarter in a row. 8 trillion records were ingested in the Data Cloud in the quarter, up 42% year-over-year and we processed 2 quadrillion records, that’s a 217% increase compared to last year. Over 1 trillion activations drove customer engagement, which is a 33% increase year-over-year. This incredible growth of data in our system and the level of transactions that we’re able to deliver, not just in the core system but especially in data cloud is preparing our customers for this next generation of AI.”