We recently compiled a list of the 20 High Growth Mega Cap Stocks You Can Buy And Hold For Next 5 Years. In this article, we are going to take a look at where Salesforce, Inc. (NYSE:CRM) stands against the other high growth mega cap stocks.
Exactly 5 years ago, the world struggled to deal with a black swan event: the COVID-19 pandemic. There was so much uncertainty that people didn’t even know if they’d be alive in the next few weeks, let alone figure out where the market was heading. Anyone who invested in the S&P 5 years ago would have gained 83%. If you had bought at the exact bottom, you’d have gained twice that amount.
What the above proves is that the present isn’t necessarily an indicator of what the future holds. All companies that had their workflows disrupted have recovered, some more than others. Some companies have strengthened their supply chains. Others have improved their work-from-home capabilities. Industries like airlines and restaurants have modified their business models to cater to the new dynamics.
These companies have been able to deal with the changing dynamics because of their financial strength and innovation. A company’s past performance and its finances give a good idea of whether it will be able to survive bad times. That’s why when we look at the best mega-cap stocks to hold for the next 5 years, we look at how well they have grown in the last 5 years.
To come up with our list of top 20 mega-cap stocks to hold for the next 5 years, we considered stocks with a market cap of at least $200 billion and a 5-year sales growth rate of at least 10%.
A customer service team in an office setting using the company’s Customer 360 platform to communicate with customers.
Salesforce, Inc. (NYSE:CRM)
Salesforce, Inc. (NYSE:CRM) connects customers and companies by offering customer relationship management (CRM) technology. It provides invoices, forecast opportunities, sales to store data, contracts, and other services. The company has grown its revenue by 19.62% over the last 5 years.
Salesforce, Inc. (NYSE:CRM) stock is down considerably this month as we enter the earnings week, with the announcement set for 26th February. One is inclined to think the concerns sparked by DeepSeek AI may be causing the downturn, but analysts are optimistic the company’s AI story is only just getting started.
According to Wedbush Securities analysts, Salesforce, Inc. (NYSE:CRM) is a clear beneficiary of AI-linked spending.
We believe CRM is a clear 2nd derivative beneficiary of the AI Revolution that could add ~$80 per share to the CRM story as this monetization story takes shape over the next 12 to 18 months, with Benioff & Co. leading the charge and this new era of AI growth.
The company already beat the higher end of its guidance in the third quarter and Q4 should be no different. While the business continues to stay strong, the management is also focusing on cost controls, the effects of which are already starting to emerge in the financial reports. The company’s EBIT is already reaching the 20% mark, the highest ever in its history. The operating margin of 33% is also helping the company translate more of its revenue into profit. With the AI tailwinds and management’s shareholder-friendly policies, the company will remain a strong investment for the next 5 years.
Overall CRM ranks 8th on our list of the high growth mega cap stocks you can buy and hold for the next 5 years. While we acknowledge the potential of CRM as an investment, our conviction lies in the belief that some 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 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 was originally published at Insider Monkey.
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