We recently published a list of Top 10 AI News You Shouldn’t Miss. In this article, we are going to take a look at where Salesforce, Inc. (NYSE:CRM) stands against other top AI news you shouldn’t miss.
All everyone could talk about in the technical AI landscape these days is DeepSeek-R1, a Chinese open-source LLM that analysts believe can give major American AI companies a run for their money. Why is DeepSeek making waves and why is it called a breakthrough in the AI race?
DeepSeek AI model is several times cheaper to use for professional purposes when compared to its American counterparts including OpenAI’s o1 model. Media reports also suggest the model beat almost all key AI models in the industry by significant margins.
CNBC’s Deirdre Bosa explained what makes these Chinese models a challenge for US tech companies:
“The cost, I mean, these models coming out of China are just built at a fraction of the price when you think about OpenAI. That’s spending $5 billion a year, burning through billions of dollars a year. These models, the DeepSeek for example, they say they built it for less than $6 million. ByteDance as well, you know, shows that it was built and you can access it at much, much lower prices. So, this really turns on sort of this truth that we have thought about generative AI for the last few years—that you need hundreds of millions of dollars to develop bigger and better models. What the Chinese labs and companies are doing is they’re going straight to the frontier. They’re building with sort of infrastructure and outputs that are already out there, built in many cases by American companies and startups, and they’re improving on it, they’re innovating on it, and producing models that are just as good, in some cases, at a fraction of the cost.”
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For this article, we picked 10 AI stocks currently in the news. With each company we have mentioned the number of hedge fund investors. Why are we interested in 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 Fund Investors: 116
Evercore ISI analysts recently updated their “AI Enablers, Adopters, and Adapters” stock list.
Salesforce, Inc. (NYSE:CRM) was part of the list.
These stocks, selected from the Russell 3000 (IWV), have a market cap exceeding $3B and have mentioned artificial intelligence more frequently in their third-quarter 2024 earnings calls than the average Russell 3000 stock over the past year. Additionally, they saw a positive reaction after their earnings reports.
The stocks are trading at a 2025 P/E discount compared to their five-year average forward P/E and are expected to see an EPS growth of over 9.6%, according to Evercore ISI analysts.
“These companies have started to build a ‘competitive moat’ around their business by either enabling AI in others, adopting the technology, or adapting to the changing nature of business, information, and labor force composition better than their peers,” wrote Julian Emanuel, head of the Equity, Derivatives & Quantitative Strategy team at Evercore ISI.
Polen Focus Growth Strategy stated the following regarding Salesforce, Inc. (NYSE:CRM) in its Q3 2024 investor letter:
“In the third quarter, we purchased new positions in Apple and Oracle and eliminated our small positions in Nike and Salesforce, Inc. (NYSE:CRM). We exited our position in Salesforce to fund better opportunities in Shopify and MSCI. Salesforce is seeing slower revenue growth than we would have expected, given the weakening macroeconomic environment. Furthermore, since its core end markets in customer relationship management (“CRM”) and Service are fairly mature, a lower growth level versus our expectations could persist for some time.”
Overall, CRM ranks 5th on our list of top AI news you shouldn’t miss. While we acknowledge the potential of CRM, our conviction lies in the belief that under the radar 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.
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