Jim Cramer’s Top Stock Picks: 10 Stocks with High Potential

2. Salesforce.com Inc. (NYSE:CRM)

Number of Hedge Fund Investors: 117

Jim Cramer mentioned that Salesforce.com Inc. (NYSE:CRM)’s Dreamforce conference this week will focus on practical uses of artificial intelligence. He is taking the opportunity to meet with key figures in the tech industry while attending the event in San Francisco.

“Salesforce’s annual Dreamforce conference this week will shine a light on useful artificial intelligence applications. I’m using my time in San Francisco for the event to catch up with a number of notable players in the tech world.”

In Q2 2024, Salesforce.com, Inc. (NYSE:CRM) achieved impressive results, with revenue rising 8.4% year-over-year to $9.3 billion and earnings per share (EPS) up 20.8% to $2.56. As a result, Salesforce.com, Inc. (NYSE:CRM) has increased its full-year EPS forecast to between $10.03 and $10.11, highlighting its effective execution in cloud and AI solutions.

Salesforce.com, Inc. (NYSE:CRM)’s focus on AI, especially with its new “AgentForce” platform, is expected to drive growth in its core Sales and Service Clouds, reinforcing its position as a leader in AI enterprise software. Salesforce.com, Inc. (NYSE:CRM) also showed strong operational efficiency with a non-GAAP operating margin of 30% in Q2 2024, demonstrating its ability to increase profitability as revenue grows.

Even with recent challenges, such as the resignation of CFO Amy Weaver, Salesforce.com, Inc. (NYSE:CRM)’s strong business fundamentals and strategic AI investments support a positive outlook. Analysts have set a target price of $308.22 for the stock. Overall, Salesforce.com, Inc. (NYSE:CRM)’s financial health, advancements in AI, and improved margins make it an appealing investment opportunity.

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.”