(Reuters) -Salesforce Inc's shares jumped 14% on Thursday after the cloud-based software provider gave an upbeat full-year profit forecast and doubled its share repurchase program, placating activist investors pushing for changes amid slowing growth.
The Dow component was set for its best day in more than two years if gains hold, and add about $27 billion to its $167 billion market capitalization.
Salesforce (NYSE:CRM) has been under pressure from four activist investors, including Elliott Management Corp, which have been pushing for increases in share buybacks and margin growth, while raising concerns about its recent pricey acquisitions.
The company has, in response, reduced costs through job cuts and shrinking its real estate footprint.
Salesforce on Wednesday reported fourth-quarter results that were better than expected and forecast strong growth in profits for the year.
"The quarter provided nearly everything investors could hope for," said RBC analyst Rishi Jaluria, one of the 22 analysts who raised their price targets by as much as $60.
"We believe Salesforce is headed in the right direction."
The company forecast adjusted operating margin of 27% for the year, much higher than the 22.5% it reported in fiscal 2023 and also above Wall Street estimate of about 23%.
Annual profit forecast of between $7.12 and $7.14 per share on an adjusted basis was also well above the $5.84 expectation, according to Refinitiv data.
Elliott, which had been in talks with Salesforce leading up to the earnings, said the "announcements represent progress towards regaining investor trust".
Still, Salesforce's first-quarter revenue forecast implied an increase of 10%, which could mark slowing growth, but was higher than analysts' estimates of about 9%.
The business software maker's plan to integrate artificial intelligence into all of its cloud, as well as Slack, data analytics platform Tableau and MuleSoft platform also gave a fillip to the stock.
Other activist investors in the company include Starboard Value, Inclusive Capital Partners and ValueAct Capital.