UBS’ Best Stocks In The AI, Growth & Low Rates Era: Top 29 US Stocks

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2. Salesforce, Inc. (NYSE:CRM)

Number of Hedge Fund Investors In Q2 2024: 117

UBS’ Sector Rating: Most Attractive

Sector: Information Technology

Salesforce, Inc. (NYSE:CRM) is a software-as-a-service company that focuses on managing the needs of the customer relationship management industry. This means that the firm’s hypothesis is dependent on industry level and firm-specific factors. Starting from the former, Salesforce, Inc. (NYSE:CRM) depends on its ability to sustain and grow recurring revenue and sales along with cost control to drive margins. Its firm-specific performance is tied to the economy, with Salesforce, Inc. (NYSE:CRM) performing well when lower rates and inflation enable businesses to allocate more resources for marketing spend. Consequently, the stock is up by a tepid 15.7% year to date as the economy has continued to remain tight. However, Salesforce, Inc. (NYSE:CRM) benefits from its sizeable industry presence. It commanded a 21.7% market share in 2023 and provides customers with a whopping 8 trillion data points to develop their strategies and decisions.

Salesforce, Inc. (NYSE:CRM) also depends on its ability to land large deals as it allows it to drive recurring revenue and boost margins. Here’s what management shared during the Q1 2025 earnings call:

“Data Cloud gives every company a single source of truth and you can securely power AI insights and actions across the entire Customer 360.

Now let me tell you why I’m excited about Data Cloud and why it’s transforming our customers and how it’s preparing them for this next generation of artificial intelligence. Data Cloud was included in 25% of our $1 million plus deals in the quarter. We added more than 1,000 data cloud customers for the second quarter in a row. 8 trillion records were ingested in the Data Cloud in the quarter, up 42% year-over-year and we processed 2 quadrillion records, that’s a 217% increase compared to last year. Over 1 trillion activations drove customer engagement, which is a 33% increase year-over-year. This incredible growth of data in our system and the level of transactions that we’re able to deliver, not just in the core system but especially in data cloud is preparing our customers for this next generation of AI.”

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