We recently published a list of 12 Best FAANG+ Stocks to Invest in Right Now. In this article, we are going to take a look at where Salesforce, Inc. (NYSE:CRM) stands against other best FAANG+ stocks to invest in right now.
The group of stocks formerly known as FAANG were synonymous with technological prowess, market dominance, and high growth. These companies provided exponential returns and offered the chance to be part of the technological revolution. Their rise to dominance was fueled by innovation, digital transformation, the increasing use of the internet, and their insatiable hunger for growth. In the process, they reshaped industries, altered consumer behavior, and redefined customer engagement. However, over the past couple of years, the acronym has lost some of its relevance as some names have changed and new companies have encroached on the territories of these mega-caps. As a result, the market has started using the term “Magnificent Seven” to better represent the most valuable tech stocks. In this list, we include the ‘Magnificent Seven’ plus five interesting stocks that focus on the transformational technology growth trends such as artificial intelligence, cloud computing, EV technology, and streaming.
Let’s begin by understanding the sheer magnitude of these stocks. We created an equal-weighted portfolio (equal investment in each stock) of all 12 mega-cap technology stocks in this list and compared their combined performance with the S&P 500 Index over the past 5 years. Astonishingly, the mega-caps portfolio has returned over 385% compared to the S&P 500 Index’s return of around 86%. Additionally, these 12 stocks now have a combined market cap of over $20.0 trillion, with around $14 trillion added in the past 5 years. In comparison, the total market cap of all US-listed stocks is approximately $60.5 trillion (as of December 2024; source: Wilshire 5000 Index), making these mega-caps account for nearly one-third of the total US market value. Although it’s not entirely fair to compare market caps to GDP, if we could, and if these 12 mega-caps formed a country, they would rival China as the second or third largest country by nominal GDP.
Despite recent intense competition, challenging market dynamics, and a difficult regulatory environment, these tech leaders still stand tall with their legacy of innovation and digital transformation. We believe their substantial investments in technology infrastructure, strategic acquisitions, international expansion, and continuous innovation have helped them maintain their dominance. Additionally, the rise of artificial intelligence and machine learning has opened new avenues for growth among these tech giants. With that, let’s explore these 12 stocks.
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Out Methodology
To identify the 10 best FAANG+ stocks, we compiled a list of U.S.-listed technology companies with largest market capitalization, along with the stocks from the FAANG acronym. Ultimately, the stocks were ranked in ascending order based on their market capitalization, with the stock having the highest market capitalization ranked at the top.
Note: All pricing data is as of market close on January 31.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
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Salesforce, Inc. (NYSE:CRM)
Number of hedge funds: 116
Salesforce, Inc. (NYSE:CRM) is a cloud-based software company specializing in customer relationship management (CRM) solutions. The company offers a comprehensive suite of cloud-based applications for sales, service, marketing, and analytics, enabling businesses to connect with their customers more meaningfully. Its platform is designed to help organizations streamline their operations, enhance customer engagement, and drive growth through data-driven insights. The company’s market cap currently stands at $324 billion, up from $178 billion five years ago.
Salesforce, Inc. (NYSE:CRM) is heavily investing in AI and machine learning to improve its services and deliver more personalized customer experiences. In recent years, the company has made strategic acquisitions such as Tableau, Slack, and Mulesoft, which have strengthened its position in the collaboration, data visualization, and analytics space. The company will continue to benefit from the increasing demand for cloud-based solutions and digital transformation initiatives across various industries. It remains optimistic about its Agentforce platform, believing that AI agents can help close deals rapidly. During the World Economic Forum in Davos, the company announced plans to invest $500 million in Argentina over the next five years to support the country’s AI growth vision. On the investment, CEO Marc Benioff said:
“We’re excited to invest in Argentina to support AI innovation, digital transformation, and workforce development with our Agentforce digital labor platform. We are entering a new era where autonomous agents can be scaled to provide a workforce without limits as humans and agents work together to drive customer success.”
Overall, CRM ranks 11th on our list of best FAANG+ stocks to invest in right now. While we acknowledge the potential of CRM to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than CRM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.