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Salesforce just flashed a big bright buy signal

Salesforce Stock

While equities as a whole had a strong end to last year, this has been tempered by a slow start to 2024. The benchmark S&P 500 index is still looking to close above its December high and get the broader rally back on track. Some stocks of particularly high quality, though, have continued to gain over the first two weeks of the year. One of these is Salesforce, Inc. (NYSE: CRM), the ever-popular customer management software platform. 

After hitting a high back in 2021, its shares started a slide that only bottomed out around this time last year. Since then, however, it's been all one-way traffic, with Salesforce shares currently up 115% in little more than twelve months. Indeed, almost a third of those gains have come since November, with the stock rallying nearly 10% alone over the past week. Heading into this week's trading, it's at its highest level in two years and looking good to continue gaining through the rest of the quarter. In fact, the stock has just had a particularly alluring buy signal flash - let's dive in and take a look. 

Bullish upgrade

Tracking stocks that are getting analyst upgrades or even just increases to their price targets is one of the most reliable and easy ways to find standout stocks. Last Thursday saw a fresh upgrade on Salesforce shares come from the team over at Baird. They upped their rating on the tech stock from Neutral to Outperform and, in the same breath, gave Salesforce shares a fresh price target of $300. 

Bullish upgrades like this, especially after a stock has already undergone a significant rally, will always be noticed by investors and tend to fuel even further gains in the near term. The team at Baird is bullish on the software sector as a whole, but on Salesforce in particular, and is particularly excited by the company's willingness to improve margins. 

In addition, they consider the current valuation to be surprisingly attractive and believe Wall Street could be seriously underestimating the company's ability to deliver top-line growth through 2024. From where shares closed last week, they're looking for a further gain of some 10%, which would put the stock within touching distance of 2021's all-time high. 

That's not even the most optimistic price target, however. Looking at MarketBeat's MarketRank tool, which also has Salesforce rated bullishly, we see the street-high price target is $350. That's pointing to a further upside of some 25% and would have shares tracking well into blue-sky territory. Considering the risk-on sentiment sweeping equities at the moment, and tech stocks in particular, it's not all that hard to see those gains materializing.

Getting involved 

Beyond Baird's update last week, which is a solid buy signal in and of itself, investors considering getting involved will gain further confidence from the likes of Oppenheimer and Bank of America, who also joined the bull camp in recent weeks. 

The latter called Salesforce a large-cap top pick for 2024, based on improving front-office demand along with the same attractive valuation that Baird picked up on. This echoed the sentiment from Bank of America, who, in the first week of the year, called Salesforce a top software stock to own for 2024. 

This kind of all-around bullish sentiment, especially after all the gains from last year, is exactly what you want to see as a potential investor and should be more than enough to spur shares toward the $300 mark. Look for shares to hold onto gains above the $270 level, which has become the newest support line, with all eyes on them getting to and smashing through the $300 mark in the coming weeks. This would set them up to test 2021's high around $310, with enough headwinds in place to see that level being taken without too much difficulty. 

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