10 AI Stocks on Wall Street’s Radar

3. Salesforce, Inc. (NYSE:CRM)

Number of Hedge Fund Holders: 162

On May 29, DA Davidson analyst Gil Luria raised the price target on Salesforce, Inc. (NYSE:CRM) to $225.00 (from $200.00) and maintained an “Underperform” rating. Salesforce is a cloud-based CRM company that has gained popularity after it unveiled its AI-powered platform called Agentforce.

The firm’s rating update follows Salesforce’s recent earnings report, demonstrating better-than-anticipated results. It reported first-quarter revenue of $9.83 billion, up 8% year-over-year and topping the analyst consensus from Visible Alpha. Meanwhile, adjusted net income was $2.5 billion, or $2.58 per share, rising from $2.41 billion, or $2.44 per share, in the year-ago quarter, also beating estimates.

Despite the positive performance, DA Davidson has pointed out concerns about the company’s future growth prospects. The firm noted how Salesforce’s future outlook has been adjusted to account for foreign exchange impacts and a modest first-quarter beat.

It also said that growth in Salesforce’s core cloud segments is slowing. However, it is being partially offset by positive developments in sectors such as data cloud and artificial intelligence. Salesforce’s committed remaining performance obligations (cRPO) growth was also discussed, which was one percentage point higher than anticipated.

Nevertheless, guidance for the second quarter was slightly below expectations, suggesting that the company may experience single-digit constant currency (CC) growth for the first time in its history.

Overall, the firm has increased the price target on the stock, but its underperform rating signifies the firm’s reservations regarding its stock performance relative to the market.