Salesforce continues to demonstrate strong performance despite challenges

Technology stocks have outperformed the market in recent years, accounting for more than 30% of total market shares, underscoring their continuous progress. This is particularly evident in the recent developments in the US stock market, which increased by more than 3% in the second quarter of 2024. Major players, including numerous technology companies, demonstrated impressive positive growth dynamics. Despite challenges, segments focusing on Artificial Intelligence (AI) remained at the forefront. Although large technology companies have dominated the market this year, finance expert James Demmert from Main Street Research emphasizes the need to invest specifically in firms that offer stable returns, particularly in uncertain economic times. The technology sector remains the backbone of the US economy, significantly contributing to the country's economic strength. The job market and wages in the IT sector remain robust, indicating a consistently high demand for skilled professionals. Regarding future-oriented technologies, Generative AI and Electrification/Renewables dominate the scene in 2023. While global IT investments were declining, significant funds flowed into these two areas, and the number of job postings remains high. Deloitte forecasts cautious growth in the technology sector for 2024, particularly in the areas of cybersecurity, cloud computing, and AI. An example of sustained success despite socio-economic challenges is Salesforce (NYSE:CRM). Their Customer 360 product and other offerings like Service Cloud and Marketing Cloud reinforce their market-leading position in the CRM segment. Despite a drop in stock price in the first quarter, Salesforce shone with a remarkable operational cash flow increase of 39% to USD 6.25 billion and an improved adjusted operating profit margin of 32.1%. According to Mar Vista Focus strategy, Salesforce remains one of the best long-term investments in the software domain. With a mix of revenue growth and increasing profitability, investors are responding positively to the renewed focus on margin improvement, share buybacks, and dividends. Although revenue growth has slowed, confidence in sustainable earnings improvements prevails. While Salesforce leads our list of the best American technology stocks according to short sellers, we believe some AI stocks potentially promise higher returns, and in a shorter time frame. For those looking for promising AI stocks, further insights can be found in our special report on cost-effective AI stocks.