S&P 500: CTA buying halts at 6,925; selling accelerates below 6,500, UBS says
Today, I’m going to talk about something that probably should have been discussed three years ago, when it was particularly relevant and when it was booming. It’s about companies with software in cloud infrastructure and companies that develop software for managers. Why am I interested in them right now? The answer is increased interest in studying companies whose growth trend is obvious. And these are, of course, high-tech companies.
Let’s start with Salesforce. But first, I would like to give you a brief overview of what kind of company it is. Salesforce is the parent company of CRM systems and provides ready-made solutions for companies that allow them to create personal accounts, CRM systems, and databases-that is, to fully serve and manage customers, keep records, and so on. In other words, it is a B2B company.
So, at the moment, out of 54 analysts surveyed, global investment banks that follow Salesforce, 42 rate this stock as a “buy” or “strong buy.” And 10 of them recommend holding the stock. Over the past month, in August, the company fell to $226 and is now trading at around $247. The trend was negative at the beginning of the month, but it has already almost recovered from this decline. It has updated its low and formed a nice triple top, which may hint at a further growth trend. 
Let’s compare this CRM company with its two competitors, namely HubSpot and Monday.com.
The first thing to pay attention to, as with anyone buying shares, is P&E. Unfortunately, HubSpot does not have P&E because it is unprofitable. Therefore, we will use the Forward P&E indicator for comparison. HubSpot has a Forward P&E of 40, Monday has 38, and Salesforce has 19. This is a huge difference from its competitors, about twice as much. Which, of course, gives us reason for optimism.
Salesforce is also included in the Dow Jones and S&P indices. Unlike HubSpot and Monday, they are not included anywhere, as they are small companies. Accordingly, in terms of reliability, Salesforce is again in the lead here.
All three companies have pretty similar graphs, starting somewhere around 2017-2022. The only difference is that Monday.com and HubSpot appear to be more volatile than Salesforce. However, unlike these two companies, Salesforce confidently updated its high at the end of last year and the beginning of this year. And this company’s growth trend has been going on since the 2000s (June 2004, to be exact), since the company’s IPO.
Therefore, from the point of view of comparing these three companies, which are direct competitors, I would probably single out Salesforce. If you want to buy a stock that is involved in software development and is related to the Data Cloud segment, plus they are also involved in implementing AI in their own development. That is, they are, in fact, directly related to everything right now. I would recommend Salesforce. And in principle, I see a pretty good time to buy these shares.