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Here’s Why Salesforce (CRM) Traded Lower in Q2

Investment advisory firm Ithaka Group released the “Ithaka US Growth Strategy” second-quarter 2024 investor letter. A copy of the letter can be downloaded here. The second quarter of 2024 saw a surge in optimism among global markets, driven by the anticipation of a looser monetary policy from the Federal Reserve and the ongoing development prospects presented by artificial intelligence (AI). This positive outlook increased the S&P 500 by 4.3% for the quarter and 15.3% for the year, the Russell 1000 Growth (“R1000G”) by 8.3% for the quarter and 21.7% for the year, and the Dow decreasing by 1.7% for the quarter and increasing by 3.7% for the year. In the second quarter, the portfolio underperformed and returned 4.2% (gross of fees) compared to the Russell 1000 Growth’s (R1G) 8.3% return. Stock Selection led the portfolio to underperform in the quarter. In addition, please check the fund’s top five holdings to know its best picks in 2024.

Ithaka US Growth Strategy highlighted stocks like Salesforce, Inc. (NYSE:CRM), in the second quarter 2024 investor letter. Salesforce, Inc. (NYSE:CRM) offers Customer Relationship Management (CRM) technology that brings companies and customers together. The one-month return of Salesforce, Inc. (NYSE:CRM) was -0.58%, and its shares gained 11.30% of their value over the last 52 weeks. On September 4, 2024, Salesforce, Inc. (NYSE:CRM) stock closed at $247.68 per share with a market capitalization of $236.782 billion.

Ithaka US Growth Strategy stated the following regarding Salesforce, Inc. (NYSE:CRM) in its Q2 2024 investor letter:

“Salesforce, Inc. (NYSE:CRM) is the largest pure-play cloud software company, holding a leading market share in customer relationship management applications and a top-five market share position in the company’s other clouds (Marketing, Service, Platform, Analytics, Integration, and Commerce). The company’s software subscription term-license model differs from the traditional perpetual-license software model in two respects: (1) the software is hosted on centralized servers and delivered over the internet, as opposed to traditional enterprise software that is loaded directly onto customers’ hard drives or servers; and (2) the revenue model is subscription-based, typically charging monthly fees per user as opposed to charging one-time licensing fees. The stock’s weak relative performance followed its fiscal first quarter earnings announcement, where the company missed top-line and cRPO (current remaining performance obligations) estimates while also issuing weak forward guidance.”

A customer at a teller’s desk, demonstrating the company’s financial services.

Salesforce, Inc. (NYSE:CRM) is in 8th position on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 117 hedge fund portfolios held Salesforce, Inc. (NYSE:CRM) at the end of the second quarter which was 154 in the previous quarter.  In the fiscal second quarter, Salesforce, Inc. (NYSE:CRM) delivered $9.33 billion in revenue, an increase of 8% year over year. While we acknowledge the potential of Salesforce, Inc. (NYSE:CRM) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

In another article, we discussed Salesforce, Inc. (NYSE:CRM) and shared Goldman Sachs’ best hedge fund stock picks and the top stocks. Mar Vista Focus strategy’s Q2 2024 investor letter noted that Salesforce, Inc. (NYSE:CRM) faced pressure during the quarter, but it is expected to benefit from its generative AI offerings. In addition, please check out our hedge fund investor letters Q2 2024 page for more investor letters from hedge funds and other leading investors.

READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.

Disclosure: None. This article is originally published at Insider Monkey.

The $250 Trillion AI Hype is Real. A few years from now, you’ll probably wish you’d bought this stock.

Dr. Inan Dogan

Dr. Ian Dogan

Co-Founder and Research Director at Insider Monkey

When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.

Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.

At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.

Do the math. According to Musk, this technology could be worth $250 trillion by 2040.

Put another way, that’s roughly equal to:

  • 175 Teslas
  • 107 Amazons
  • 140 Metas
  • 84 Googles
  • 65 Microsofts
  • And 55 Nvidias

And here’s the wild part — this $250 trillion wave isn’t tied to one company, but to an entire ecosystem of AI innovators set to reshape the global economy.

It’s a leap so massive, it could reshape how businesses, governments, and consumers operate worldwide.

Even if that $250 trillion figure sounds ambitious, major firms like PwC and McKinsey still see AI unlocking multi-trillion-dollar potential.

How could anything be worth that much?

The answer lies in a breakthrough so powerful it’s redefining how humanity works, learns, and creates.

And this breakthrough has already set off a frenzy among hedge funds and Wall Street’s top investors.

What most investors don’t realize is that one under-owned company holds the key to this $250 trillion revolution.

In fact, Verge argues this company’s supercheap AI technology should concern rivals.

Before I reveal the details, let’s talk about how some of the richest people on the planet are positioning themselves.

  • Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
  • Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
  • Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.

When billionaires from Silicon Valley to Wall Street line up behind the same idea — you know it’s worth paying attention to.

Even as we admire what Tesla, Nvidia, Alphabet, and Microsoft have built, we believe an even greater opportunity lies elsewhere…

But the real story isn’t Nvidia — it’s a much smaller company quietly improving the critical technology that makes this entire revolution possible.

And judging by what I’m hearing from both Silicon Valley insiders and Wall Street veterans…

This prediction might not be bold at all:

A few years from now, you’ll wish you’d owned this stock.

The best part? You can discover everything about this company and its groundbreaking technology right now.

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Wall Street calls this $3 stock a “Melting Ice Cube.” They said the same thing about BTI before it returned 90%.

Dr. Inan Dogan

Dr. Ian Dogan

Co-Founder and Research Director at Insider Monkey

My name is Inan Dogan. I’m the co-founder and Research Director of Insider Monkey. I have an important message for you today.

Since March 2017, my stock picks have returned 16.5% annually. Today, I’ve found an opportunity even bigger than my British American Tobacco call.

Two years ago, Wall Street wrote off British American Tobacco (BTI) as a “melting ice cube.” The stock had crashed 40% from its peak, and consensus said the business was dying.

We looked under the cover and realized they were wrong.

We alerted our subscribers, and BTI returned 90% in just 16 months.

Now if you had invested just $10,000 in BTI in June 2024, you’d be sitting on $19,000 in October 2025.

Today, we have identified a nearly identical pattern in a digital-first giant trading at $3.

While the market panics over a surface-level revenue decline, our PhD-led research shows management has actually surgically cut $100 million in waste to focus on high-margin growth.

This pattern is a hallmark of our 16.5% annual return track record. The current opportunity offers a 400% upside potential—dwarfing even our 90% BTI return.

Get the ticker for our new “Underdog” pick and the full BTI case study for just 99 cents.

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