We recently identified the best dow stocks according to hedge funds. Salesforce, Inc. (NYSE:CRM) takes the 4th spot on our list of the best Dow stocks to buy now. To learn about the 3 stocks that ranked higher than Salesforce, Inc. (NYSE:CRM), go to 8 Best Dow Stocks to Buy According to Hedge Funds.
On May 17, the Dow Jones closed out at record highs, crossing the 40,000 milestone for the first time ever. However, this was a little short-lived as the index is down nearly 2.35% since that day, as of May 23. While the index seems to be underperforming the S&P 500 and NASDAQ, it doesn’t fully cover the market conditions like the latter two. Nevertheless, the S&P 500 and NASDAQ’s performance is mostly dominated by mega-cap tech stocks, especially NVIDIA, which isn’t a part of the Dow Jones index.
Dow Bucks Trend, Falls Despite NVIDIA’s Upbeat News
NVIDIA reported its first-quarter 2025 earnings on May 22. Despite record numbers, the market failed to rally along with the company. This includes the Dow Jones index as all 30 of its components ended the day in red on May 23, including some of the best Dow stocks that are direct AI beneficiaries such as Amazon and Microsoft.
In its Q1 2025, NVIDIA generated a revenue of $26.04 billion, which was up over 262% year-over-year and surprised the consensus estimates by $1.45 billion. The company reported earnings per share (EPS) of $6.12, an over 460% increase year-over-year. Moreover, NVIDIA announced a 10 for 1 split, which will take effect on June 7. For the second quarter, NVIDIA expects a revenue of $28.0 billion. The company predicts that the automotive sector will emerge as the leading enterprise vertical within its Data Center division in the current year. At its Q1 2025 earnings call, the company’s CFO, Colette Kress said:
“Leading LLM companies such as OpenAI, Adept, Anthropic, Character.AI, Cohere, Databricks, DeepMind, Meta, Mistral, xAI, and many others are building on NVIDIA AI in the cloud. Enterprises drove strong sequential growth in Data Center this quarter. We supported Tesla’s expansion of their training AI cluster to 35,000 H100 GPUs. Their use of NVIDIA AI infrastructure paved the way for the breakthrough performance of FSD Version 12, their latest autonomous driving software based on Vision. Video Transformers, while consuming significantly more computing, are enabling dramatically better autonomous driving capabilities and propelling significant growth for NVIDIA AI infrastructure across the automotive industry. We expect automotive to be our largest enterprise vertical within Data Center this year, driving a multibillion revenue opportunity across on-prem and cloud consumption.”
After reporting stellar earnings, NVIDIA share price crossed the $1000 mark for the first time and was 9.3% higher in a day, at the May 3 market close. Nevertheless, the company failed to rally the market with it as the S&P 500 was down almost 0.75% during the same period, the NASDAQ-composite recorded a decline of 0.4% and the Dow Jones index experienced its worst day in almost 14 months declining by over 1.5%.
Jim Cramer: Celebrating the 40K Milestone
Even though the Dow Jones index is underperforming other indices in 2024, CNBC Mad Money host, Jim Cramer still believes in celebrating its 40,000 points milestone. On May 20, he urged the investors to appreciate the market’s progress despite past downturns. Cramer emphasized that while the Dow does not fully represent the market like the S&P 500, it reflects a team effort across various sectors, which should have been demolished by the challenges they faced, such as the Federal Reserve’s rate hikes, inflation, and supply chain issues during the Covid-19 pandemic, yet they thrived. He acknowledged the potential for market declines but stressed the importance of recognizing the achievements of these stocks and companies over the years.
Cramer mentioned that he started as a summer associate in 1983 at Goldman Sachs when the Dow was just over 1000 points, the market was full of bears in multiple sectors but the stock market “left them behind.” He added that the index going from 1000 to 40,000 shows the strength of these companies and that they “will make you money.”
Is Salesforce, Inc. (NYSE:CRM) the Best Dow Stock To Buy According to Hedge Funds?
Salesforce, Inc. (NYSE:CRM)
Number of Hedge Fund Holders: 154
Salesforce, Inc. (NYSE:CRM) is a California-based company that offers Customer Relationship Management (CRM) technology worldwide. Hedge fund sentiment was positive toward Salesforce, Inc. (NYSE:CRM) in Q1 as hedge funds with investments in the stock were 154 in the quarter, with positions worth $16.62 billion. This is compared to 131 funds with positions worth $14.98 billion in the preceding quarter. Fisher Asset Management is the biggest shareholder in the company as of March 31 and has a position worth $3.265 billion.
As of May 23, Salesforce, Inc. (NYSE:CRM) has a consensus Buy rating among 28 Wall Street analysts, and its average price target of $338.45 implies an upside of 21.78% from current levels.
Vulcan Value Partners commented on Salesforce, Inc. (NYSE:CRM) in its first quarter 2024 investor letter:
“Salesforce, Inc. (NYSE:CRM) 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.”
Salesforce, Inc. (NYSE:CRM) is number four on our list of the best Dow stocks. Click to see the other 7 Best Dow Stocks.
If you are looking for an AI stock that is as promising as Microsoft but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
Read Next: 10 Best Dividend Stocks of 2024 and the Top 20 Countries Wealthy People Choose to Live In.
Disclosure. None. This article is originally published at Insider Monkey.
