Tuesday, September 12

Salesforce: Up 70% and Just Getting Started

We've loved the year of efficiency so far as profits have come roaring back to a wounded market. A lot of the excitement surrounding this year of efficiency is placed on plays like Meta, who really kicked the trend off. 

But no one has threaded the needle of growing revenue while massively slashing costs more than Salesforce ($CRM). 

For the second (and almost certainly last) time this year, Salesforce has beaten our price target in less than a single quarter. 

And to be clear, this time all the factors galvanizing CRM's valuation are in the past. You can only cut costs so much and Salesforce has shown they knew exactly where to trim the fat in their organization. 

So now, as the Dreamforce conference kicks off and we start getting some idea of what Salesforce's actual plans for generative AI are, let's lock in our price target early and gear up for a year of slower growth as Salesforce moves toward the next big value drivers at their company. 

You'll hear a lot of hype this week as CRM starts showing off demos of their Generative AI suite, but those won't materially affect their stock price until 2024 at the earliest. 

Efficiency is great, but the slow game after all your cuts is far more important. Let's see how well Salesforce can manage this transition now that they've beaten our growth targets twice in a single year👇

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