Why Salesforce Stock Could Be at Fresh Highs by February
Shares of Salesforce Inc. (NYSE: CRM) were the outlier in Monday's session, logging nearly a 4% gain against a sharp drop in tech stocks. While the tech titan ended last year on a weaker note, selling off in the final few weeks of December, the start of this year has been kinder to Salesforce bulls.
The past two weeks alone have seen the stock gain 10%. In early trading on Tuesday, the stock was logging even further gains and coming within just a few dollars of December's high.
The San Francisco-headquartered company has a $300 billion market cap and is a leader in customer relationship management (CRM). Its products help businesses manage customer data, sales pipelines, and marketing automation, making it an almost must-have tool for many companies across industries. Looking ahead into 2025, there are plenty of reasons for investors to be excited, especially around the prospect of the stock getting back to fresh all-time highs in the coming weeks. Let's jump in.
Salesforce Sets a Strong Foundation Heading Into 2025
Salesforce's fundamental performance over the past couple of quarters has been mixed, but there's plenty to like. The company smashed revenue expectations with its latest earnings report, delivering a record-high print, though a miss on EPS spooked some investors. Despite this, management's bullish outlook and guidance for 2025 should not be ignored.
The December report suggested there's a strong foundation in place, with Salesforce navigating market headwinds while continuing to scale its operations. This optimism sets the tone for the year ahead, particularly as investors eye Salesforce's next earnings report in early March. Another record revenue print—this time ideally paired with beats on both top and bottom-line expectations—should support the stock as it rallies back towards highs.
Analysts Point to Salesforce’s Bright Future
One of the main reasons we're so excited about Salesforce shares is the analysts' coverage of the stock. In a note to clients last week, the team over at TD Cowen upgraded CRM shares from a Hold rating to a Buy while increasing their price target from $380 to $400. From where the stock closed on Monday, that's pointing to a targeted upside of some 15%, well into fresh all-time high territory.
This bullish stance is echoed by Piper Sandler and Needham & Company, both of which reiterated their Buy ratings earlier this month. Piper Sandler set a price target of $405, while Needham is targeting $400, underscoring the broad confidence in Salesforce's ability to deliver strong returns. Much of this optimism stems from Salesforce's dominant market position and its AI-powered tool, Agentforce, which analysts believe could drive significant revenue growth by early 2026.
Bearish Views Remain in the Minority Among Analysts
It has to be noted, though, that while there's a lot to like about Salesforce, there are some reasons to be cautious. Not all analysts are on board with the bullish narrative. Earlier this month, Guggenheim downgraded the stock to a Sell rating, while Macquarie assigned a Neutral rating in December.
These more cautious stances are primarily tied to concerns around Salesforce's ability to consistently beat analyst expectations. After missing on EPS last quarter, they're likely waiting to see if the company can reestablish its track record of strong beats. Still, it's worth pointing out that these bearish takes are in the minority, standing out against the backdrop of overwhelmingly positive sentiment from Wall Street.
Salesforce: A Stock to Watch Closely in the Year Ahead
Overall, heading into the rest of the quarter, there's much to like about Salesforce. This is supported by the technical setup, with the stock's Relative Strength Index (RSI) currently at a nicely bullish 63. This suggests there's a ton of bullish momentum with plenty of room to run before the stock enters overbought territory.
For those of us happy to lean into the analysts' bullish outlook, this has all the makings of a fantastic entry opportunity. The broader macro environment, strong recent performance, and supportive technicals all point to Salesforce being a stock that's worth watching closely in 2025.
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