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Here’s Why Salesforce (CRM) Traded Lower in Q2

Investment advisory firm Ithaka Group released the “Ithaka US Growth Strategy” second-quarter 2024 investor letter. A copy of the letter can be downloaded here. The second quarter of 2024 saw a surge in optimism among global markets, driven by the anticipation of a looser monetary policy from the Federal Reserve and the ongoing development prospects presented by artificial intelligence (AI). This positive outlook increased the S&P 500 by 4.3% for the quarter and 15.3% for the year, the Russell 1000 Growth (“R1000G”) by 8.3% for the quarter and 21.7% for the year, and the Dow decreasing by 1.7% for the quarter and increasing by 3.7% for the year. In the second quarter, the portfolio underperformed and returned 4.2% (gross of fees) compared to the Russell 1000 Growth’s (R1G) 8.3% return. Stock Selection led the portfolio to underperform in the quarter. In addition, please check the fund’s top five holdings to know its best picks in 2024.

Ithaka US Growth Strategy highlighted stocks like Salesforce, Inc. (NYSE:CRM), in the second quarter 2024 investor letter. Salesforce, Inc. (NYSE:CRM) offers Customer Relationship Management (CRM) technology that brings companies and customers together. The one-month return of Salesforce, Inc. (NYSE:CRM) was -0.58%, and its shares gained 11.30% of their value over the last 52 weeks. On September 4, 2024, Salesforce, Inc. (NYSE:CRM) stock closed at $247.68 per share with a market capitalization of $236.782 billion.

Ithaka US Growth Strategy stated the following regarding Salesforce, Inc. (NYSE:CRM) in its Q2 2024 investor letter:

“Salesforce, Inc. (NYSE:CRM) is the largest pure-play cloud software company, holding a leading market share in customer relationship management applications and a top-five market share position in the company’s other clouds (Marketing, Service, Platform, Analytics, Integration, and Commerce). The company’s software subscription term-license model differs from the traditional perpetual-license software model in two respects: (1) the software is hosted on centralized servers and delivered over the internet, as opposed to traditional enterprise software that is loaded directly onto customers’ hard drives or servers; and (2) the revenue model is subscription-based, typically charging monthly fees per user as opposed to charging one-time licensing fees. The stock’s weak relative performance followed its fiscal first quarter earnings announcement, where the company missed top-line and cRPO (current remaining performance obligations) estimates while also issuing weak forward guidance.”

A customer at a teller’s desk, demonstrating the company’s financial services.

Salesforce, Inc. (NYSE:CRM) is in 8th position on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 117 hedge fund portfolios held Salesforce, Inc. (NYSE:CRM) at the end of the second quarter which was 154 in the previous quarter.  In the fiscal second quarter, Salesforce, Inc. (NYSE:CRM) delivered $9.33 billion in revenue, an increase of 8% year over year. While we acknowledge the potential of Salesforce, Inc. (NYSE:CRM) as an investment, our conviction lies in the belief that 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 as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

In another article, we discussed Salesforce, Inc. (NYSE:CRM) and shared Goldman Sachs’ best hedge fund stock picks and the top stocks. Mar Vista Focus strategy’s Q2 2024 investor letter noted that Salesforce, Inc. (NYSE:CRM) faced pressure during the quarter, but it is expected to benefit from its generative AI offerings. In addition, please check out our hedge fund investor letters Q2 2024 page for more investor letters from hedge funds and other leading investors.

READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.

Disclosure: None. This article is originally published at Insider Monkey.

AI Fire Sale: Insider Monkey’s #1 AI Stock Pick Is On A Steep Discount

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Exponential Growth on the Horizon: Forget linear growth – AI is poised for a hockey stick trajectory.

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Early investors will be the ones positioned to ride the wave of this technological tsunami.

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Disruption is the New Name of the Game: Let’s face it, complacency breeds stagnation.

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This is the #1 Gold Stock for your 2025 watch list

Brace yourself.

There’s no question that thanks to Washington’s disastrous policies – and out-of-control spending – the outlook for the U.S. economy now appears dire.

And with the U.S. national debt now rising by a staggering $1 trillion every 100 days…there are no easy solutions to help get the nation back on track.

While Jay Powell and the Biden-Harris White House sweat out a federal debt that has reached $35.5 trillion – and climbing – many investors have raced to the sidelines with their cash.

But the truly savvy investors laugh while Jay Powell frets, because they understand that this ridiculous spending has also triggered a nearly unprecedented bull market for gold.

Just look at this chart for the yellow metal.

After testing the $2,000/ounce mark in August 2020 and February 2022, gold traded down to near $1,600/ounce in October 2022.

Since then, gold prices have been on an absolute tear and currently sit above $2,600/ounce, a $1,000/oz increase in just two short years.

But the surge in gold prices that we’ve seen over the past few years could pale in comparison to what’s on the horizon. As shocking as it may sound, with no end in sight for the Fed’s money printing, we could see the price of gold increase by many multiples in the years ahead.

With soaring inflation, the dollar stands to lose more and more of its value, which means you’ll need a lot more dollars to buy gold.

According to legendary investor Peter Schiff, today’s seemingly-high gold price of $2,600/oz. “could soar to $26,000/oz. — or even $100,000/oz. There’s no limit because gold isn’t changing — it’s the value of the dollar that’s decreasing.”[i]

Meanwhile, as profitable as gold has been, select gold mining stocks have really kicked into high gear, handing investors even bigger profits.

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