2. Salesforce.com, inc. (NYSE:CRM)
Number of Hedge Fund Investors: 117
Jim Cramer expressed his doubts about many AI initiatives he has encountered, suggesting that they often repackage existing ideas rather than offer anything new. However, he sees Salesforce.com, inc. (NYSE:CRM)’s CEO, Marc Benioff’s Agent Force as a notable exception. Cramer believes this innovation has the potential to be genuinely different and highly profitable for both Salesforce and its customers.
“Mark Benioff has added many great products over the years, but he seems most proud of this one. So far, it hasn’t mattered to the stock; it’s only been out for a very short period of time, but a very high percentage of companies here at Dreamforce have already signed up for it. Ultimately, AI will end up doing many things.
I’m skeptical about many of the initiatives I’ve heard for AI; they tend to be old things that would have been done anyway, just being rebranded as AI. But with Marc’s Agent Force, I see something truly different and very lucrative for both Salesforce and its clients.”
Salesforce.com, inc. (NYSE:CRM)’s positive outlook is supported by its strong earnings in Q2 2024, which surpassed analysts’ expectations and highlighted significant revenue growth due to increasing demand for its cloud-based customer relationship management solutions. Salesforce.com, inc. (NYSE:CRM) has successfully acquired and expanded its customer base, solidifying its position as a market leader.
Salesforce.com, inc. (NYSE:CRM) is also making substantial investments in artificial intelligence, particularly with its new Einstein GPT, which adds generative AI features to its CRM platform, enhancing customer experiences and boosting operational efficiency. Furthermore, Salesforce.com, inc. (NYSE:CRM) is broadening its product lineup, including upgrades to its Marketing Cloud and better integration with Slack, allowing it to address a wider array of customer needs and drive long-term growth.
With a diverse customer base that includes many Fortune 500 companies, Salesforce.com, inc. (NYSE:CRM) enjoys high retention rates and increased spending from existing clients, contributing to steady revenue growth. As businesses focus more on digital transformation and improving customer engagement, Salesforce.com, inc. (NYSE:CRM) is well-equipped to take advantage of these trends. Recent strategic partnerships and new product launches have also strengthened investor confidence in Salesforce.com, inc. (NYSE:CRM)’s growth potential, leading to a favourable outlook for Salesforce.
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.”
