We recently compiled a list of the 10 Best Stocks To Invest In According to Billionaires. In this article, we are going to take a look at where Salesforce, Inc. (NYSE:CRM) stands against the other billionaire-approved stocks.
Billionaires and top hedge fund managers typically dominate the stock market, focusing on leading companies with strong track records and exceptional performance. They usually don’t waste time with underperformers—they target the market’s elite.
The Stock Market Rally
Before diving into the top stock picks among billionaires, reviewing how the market has performed so far this year is essential. On September 18, the Federal Reserve cut its policy rate by 50 basis points, lowering it to 4.75%–5.00% from 5.25%–5.50%. This move fueled a market rally, pushing stocks to a new intraday record high, and marking the 39th all-time high of 2024—the first since mid-July. Minneapolis Fed president Neel Kashkari acknowledged that while the rate cut was unusual historically, shifting the policy focus from controlling high inflation to addressing a weakening labor market was necessary. Here are some comments:
“Right now, we still have a strong, healthy labor market. But I want to keep it a strong, healthy labor market, and a lot of the recent inflation data is coming in looking very positive that we’re on our way back to 2%. So I don’t think you’re going to find anybody at the Federal Reserve who declares mission accomplished, but we are paying attention to what risks are most likely to materialize in the near future.”
Market expectations point to an equal probability of the Federal Open Market Committee (FOMC) cutting rates by either a quarter- or half-percentage point at its November meeting, with a higher chance of the larger reduction in December. Overall, markets are signaling the Fed’s intent to bring rates to a “neutral” level that neither stimulates nor restricts economic growth.
What the Top Dogs of Wall Street are Saying About the Market
For nearly two years, bulls have dominated Wall Street, driven by a resilient U.S. economy and growing enthusiasm around artificial intelligence (AI). This momentum has propelled the Dow Jones Industrial Average, the S&P 500, and the tech-heavy Nasdaq Composite to multiple record highs in 2024. Despite the surge, not everyone seems hopeful about the market, with some of the most influential billionaire investors, including Warren Buffett of Berkshire Hathaway, signaling caution. Buffett, known for his long-term optimism, has been a net seller of stocks for seven straight quarters.
On the other hand, billionaire investor Ray Dalio recently raised concerns about the “enormous amount of debt” burdening the U.S. economy. He cautions that neither former President Donald Trump nor Vice President Kamala Harris is likely to focus on addressing debt sustainability in the upcoming presidential election, suggesting that the pressure from the $35.3 trillion national debt will persist, regardless of the election outcome.
Our Methodology
In this article, we analyzed Insider Monkey’s exclusive database of billionaire stock holdings to select the 10 stocks with the highest number of billionaire investors. These billionaires are founders or managers of some of the world’s leading hedge funds and companies.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A customer service team in an office setting using the company’s Customer 360 platform to communicate with customers.
Salesforce, Inc. (NYSE:CRM)
Number of Billionaire Investors: 23
Salesforce, Inc. (NYSE:CRM), a leading IT company based in San Francisco, specializes in Customer Relationship Management (CRM) technology. The company’s flagship AI offering, Data Cloud, leverages 8 trillion data points to enhance CRM, delivering smarter insights and improved client interactions.
On September 20, BofA Securities reaffirmed its Buy rating on Salesforce, Inc. (NYSE:CRM) with a price target of $325. This followed the company’s Dreamforce conference, where the IT leader introduced Agentforce, formerly known as Einstein Copilot, a key addition to its AI suite. This new autonomous agent strengthens Salesforce’s AI capabilities, working alongside tools like Data Cloud and Agent Builder for data management and custom agent development.
Salesforce, Inc. (NYSE:CRM) reported strong second-quarter results, with earnings per share at $2.56, exceeding the consensus estimate of $2.36. The company also posted an 8% increase in sales, driven by a 9% growth in subscription and support revenues. Additionally, Salesforce, Inc. (NYSE:CRM)has agreed to acquire Own Company, a data protection and management solutions provider, for $1.9 billion in cash.
At the close of the second quarter of 2024, 23 billionaire investors held stakes in Salesforce Inc. (NYSE:CRM), with a combined total value of $6.2 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.”
Overall CRM ranks 8th on our list of the stocks to invest in according to billionaires. While we acknowledge the potential of CRM as an investment, we believe that there are under-the-radar AI stocks trading at highly discounted valuations that hold greater promise for anyone looking to diversify their portfolio. If you are looking for an AI stock that is more promising than CRM, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.