On October 1, Jim Cramer discussed Veeva Systems Inc. (NYSE:VEEV) while reviewing the third-quarter recovery in software stocks. He mentioned that he prefers Salesforce, Inc. (NYSE:CRM), as he said:
On the first day of a brand new quarter, October 1, you need a compass. You know what provides you the best compass? What can navigate you the best? Last quarter… We all use S&P 500 as our benchmark in this business. Now, the index finished up 2.03% for the third quarter. Not bad, not great… Some stocks are bounceback stocks. Remember that SaaS-pocalypse thing? That theory where all enterprise software would be destroyed by AI? Veeva, a company that makes software for life sciences, had been put through the AI displacement meat grinder.
When the displacement didn’t happen, those betting against it blew up, and the whole group came roaring back. And that’s how Veeva finished up 61%. At just over 30 times earnings and almost 135 points from the bottom in April, I’ve just got to say, uh-uh, I’m not going to be in this one. I’d rather be in the bounceback that is Salesforce, a competitor that has a lot further to go.
Cramer discussed enterprise software rebound for both companies at the end of August.
Both Companies Are Building AI Into Their Products
Veeva Systems Inc. reported fiscal second-quarter 2027 revenue of $928 million, up 18%, and adjusted earnings per share of $2.35, compared with $1.99 a year earlier. Its Falcon AI platform had five early adopters, with initial deployments expected this year. As for Salesforce, Inc., it reported approximately $11.3 billion in fiscal second-quarter revenue, up 11%, including a $456 million contribution from Informatica. Its expanded Anthropic partnership, announced in August, allows users to access Salesforce data and perform sales tasks directly through Claude. Discussing the Dow Jones Industrial Average’s performance in Q3, Cramer added:
In the end, I think the best lessons from the third quarter came from the 30 stocks in the Dow Jones Industrial Average, which finished down 2.7%. The winner was Salesforce, up 46.5%. This is another SaaS-pocalypse survivor. Still one more stock that was leaned on by that Situational Awareness outfit, giving Salesforce a chance to buy back a lot of stock much lower. And it reported a great quarter along with a big partnership with Anthropic. We’re sticking with it for the Charitable Trust. One of these stocks made it to our list of best agentic AI stocks to buy.
Customer Transitions and Earnings Expectations Still Matter
Veeva Systems Inc.’s migration from Salesforce-based software to its own Vault CRM introduces execution risk. Its latest quarterly filing warns that disruptions, delays or unsuccessful customer migrations could hurt the business. For Salesforce, Inc., the reported growth rate includes acquired revenue. Its Agentforce annual recurring revenue also uses an expanded definition that now includes additional AI offerings, Slackbot and Headless 360. That change matters when assessing the reported growth of its AI business.
Veeva trades at approximately 30x forward earnings versus 14x for Salesforce. Veeva’s faster revenue growth comes with a considerably higher multiple, while Salesforce offers the lower-priced exposure Cramer favors. We recently raised the question if Veeva’s margin expansion is sustainable.
Fund Participation Edges Lower in Both Stocks
According to Insider Monkey, Veeva had 61 hedge fund holders in the second quarter, compared with 62 previously. Salesforce had 99, down from 101. These were modest declines in participation. Short interest represented 3.35% of Veeva’s float and 4.54% of Salesforce’s.
Both companies are finding uses for AI within their existing businesses. Veeva Systems Inc.’s stronger growth and specialist focus come at a premium, with a major customer migration still underway. Salesforce, Inc. gives a less expensive way to participate in the software recovery. However, investors still need to separate acquisition contributions and changing AI metrics from the progress.
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