Salesforce.com Inc. shares reached a record high Wednesday as nearly half the analysts covering the customer-relations software management company hiked price targets on the stock following a strong quarter that came out relatively clean even with several moving parts.
Salesforce CRM, +2.18%[1] shares reached a record intraday high of $132.55 on Wednesday, and were last up 2.3% at $129.84 on heavy volume. The last record high of $131 was reached May 14. It remains to be seen whether Salesforce will carve out a fresh record close seeing its current closing high from May 11 is $130.63. More than 11 million shares exchanged hands by afternoon trading, compared with a 52-week average daily trading volume of 4.7 million shares.
Shares are up 27% for the year, compared with an 8.2% gain in the Nasdaq Composite Index COMP, +1.00%[2] and a 2% rise in the S&P 500 index SPX, +1.40%[3]
Late Tuesday, Salesforce reported earnings that topped Wall Street estimates[4], even as its acquisition of application programming interface company MuleSoft[5] diluted earnings, and posted its first quarter of more than $3 billion in sales. Salesforce also raised its outlook for the year with $315 million of that $415 million revenue hike coming from MuleSoft.
On a Tuesday conference call, Salesforce Chief Executive and Chairman Marc Benioff also announced the company had closed its largest deal ever with an unnamed insurance company in a traditionally slow first quarter and that its Einstein AI product was generating more than 2 billion predictions to customers a day. Einstein incorporates artificial intelligence to provide predictions and recommendations based on a company’s business processes and customer data.
Opinion: Why Marc Benioff’s AI bet will power Salesforce’s next wave of growth[6]
Canaccord analyst Richard Davis, who has a buy and raised his price target to $150 from $135, applauded Salesforce for the MuleSoft acquisition as a way of gaining more leverage in a software industry that is thriving more on cooperation than outright competition. He noted:
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One of the primary reasons why Salesforce is “sticky” with customers (despite inevitable wheezing about pricing) is that Salesforce integrates with so many other software vendors. In our opinion, the software industry has become an industry of open API’s and “coopetition.” This is what [CEO Satya] Nadella finally did for Microsoft, and it has been Benioff’s vision for Salesforce... |