Sign Up

Options Corner: Smart Money Inflows Into Salesforce Signal A Possible Recovery Play

Thanks to rising recession fears exacerbated by multiple trade wars. Investors have turned to alternative avenues to protect their wealth, from purchasing gold to bidding up real estate investment trusts (REITs). However, the smart money has an even bolder idea: rotate back into heavily deflated technology firms such as cloud-based software giant Salesforce Inc (NYSE:CRM).

To be completely upfront, the idea of betting on Salesforce’s stock is a contrarian and therefore risky one. Aside from the tariffs that could impose macroeconomic pressures against Salesforce's primary revenue drivers, the company didn't do itself any favors when it released its fourth-quarter earnings results late last month.

Headline figures came in mixed, with the highlight being earnings of $2.78 per share, beating the consensus estimate of $2.61. Unfortunately, revenue in the quarter landed at $9.99 billion, missing the consensus view of $10.03 billion (though it was an improvement of nearly $9.3 billion from the same quarter last year).

See Also: US Home Sales Jump In February, Median Price Nears $400,000

Still, the real story at the time was management's guidance for fiscal year 2026 revenue, which ranges from $40.5 billion to $40.9 billion. In contrast, analysts were expecting revenue to reach $41.375 billion. Subsequently, Salesforce suffered conspicuous volatility.

Recently, though, a floor appears to have developed around the $270 level, and the show support may have fundamental justification. Last week, Salesforce committed to invest $1 billion in Singapore's artificial intelligence sector, an effort to promote the adoption of the company's AI product Agentforce.

Further, analysts are generally optimistic about Salesforce stock, rating the equity a consensus Buy. Wedbush analyst Daniel Ives in particular remarked ...