To The Moon

The AI narrative has been a major factor behind strong equity returns in 2023 and 2024, with promises of substantial productivity gains.

According to Barclays’s analysis, global AI stocks have delivered a 16.5% year-to-date return, significantly outpacing the MSCI ACWI Index’s 6% return on an equal-weighted basis.

If we have been following the AI revolution for whole of 2024, we can see that the benefits from the AI revolution have largely been concentrated in hyperscalers and foundational hardware players, such as Big Tech and semiconductor companies.

But we saw a shift to AI software companies as well after the U.S. elections, the software sector focusing on Ai have outperformed the Big Tech and semiconductor companies.

Shift Catalyst By Multiple Expansions In AI Technology

If we looked at the AI software companies who have performed better, these are fueled by advancements in AI technology from generative AI co-pilots to newer Agent AIs.

So I believe that we should be looking at these companies who are producing generative AI co-pilots and better enhanced AI agents.

The AI revolution, in my opinion will be shifting to the use of these AI agents which could be made available to consumers. This should powered the next wave of leaps in functionality and adoption.

What this would do will be shown in the upside of some of these stocks that could be catalyzed by higher EPS growth.

So which are these stocks we could look at?

Salesforce (CRM) Tapping Into $7 Trillion Digital Labor Market

$Salesforce.com(CRM)$ latest earnings on 03 Dec 2024 saw a 2.24% change since the release. The next earnings date is scheduled to be on 04 Mar 2025.

The earnings call focused heavily on the successful launch and early adoption of Agentforce, highlighting significant financial growth and strategic advancements in AI and data integration. Despite these successes, challenges remain in certain geographic markets and specific product lines like MuleSoft and Tableau. Overall, the sentiment of the call was optimistic about future growth and innovation.

During the Salesforce earnings call for Q3 2025, the company provided guidance emphasizing its strong financial performance and transformative technological advancements, particularly with Agentforce. Revenue for the quarter was $9.44 billion, up 8% year-over-year, with a non-GAAP operating margin of 33.1%, marking a 190 basis point improvement.

Salesforce introduced Agentforce, their new AI-driven platform, which saw 200 deals closed within one week of its launch on October 24. The company plans to launch Agentforce 2.0 on 17 December 2024.

Salesforce’s new AI platform, generated over 200 deals in its first week and is poised to drive future growth despite not yet being a material contributor to CRPO. The company highlighted its continued investment in growth opportunities, including hiring 1,400 new sales representatives in Q4 to capitalize on the burgeoning demand for its AI solutions.

Data Cloud was included in 8 of the top 10 deals, processing 767 trillion records monthly. The number of AI deals tripled year-over-year in Q3. Half of the top 10 wins in Q3 were international, with significant growth in LATAM, Canada, and Australia.

If we looked at how CRM have positioned itself to capture the global AI in CRM market, I would think that they are in a good position to do that.

Salesforce (CRM) Currently Price Target - Potential Buy

If we looked at how CRM have been trading recently, it has presented a good opportunity for us to buy in, if you looked at the BOLL chart, it is currently trending in the mid-tier, and we saw a sideway trading as well.

So I am expecting CRM to make a bullish MACD crossover and then we should see another KDJ showing a strong uptrend, this should bring CRM back into the BOLL top-tier, and we could be seeing CRM moving into its previous high around $369.

Salesforce (CRM) Option Skew Show Slightly Bearish

The implied volatility skew shows the market's bias for pricing in volatility risk to the option premium of downside puts and upside calls. The implied volatility for downside puts is increasing relative to upside calls, this suggests the market is pricing in a larger fear to a downside move.

I would put it as an opportunity for us to look into getting into CRM as it make its reversal to the bullish side. The current skew indicator is showing slightly bearish.

Summary

I would be watching CRM on 30 Dec trading to find an opportunity to capture it makes its bullish upside comes 2025 and before its next earnings.

There should be good for CRM as with its Agentforce 2.0 system, Salesforce is also strategically moving in the AI domain. Designed to combine cutting-edge consumer data with automation, the platform seeks to save company expenses by allowing AI agents to oversee difficult chores. As companies use these technologies, Wedbush projects that Salesforce shares may see a $80 upside over the next 12 to 18 months.

Appreciate if you could share your thoughts in the comment section whether you think Salesforce shares would be on an upside movement comes 2025.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.