Salesforce's Clear Path to $400 and Beyond

Key Points

• Shares of Salesforce have been riding a strong rally all year.
• Fresh bullish upgrades point to as much as 25% upside from where they’re currently trading. 
• Technical indicators signal strong momentum with lots more room to run.

Shares of Salesforce Inc NYSE: CRM have been a standout performer this year, as they continue to add gains to the 180% rally that kicked off in late 2022. Two years in, this tech giant is looking stronger than ever. Up 70% since May alone and already setting record highs this month, Salesforce has cemented itself as one of the market’s top growth names. 

Salesforce’s bread and butter lies in enterprise customer relationship management (CRM) software. It has been a red-hot stock for a while now, with investors and analysts alike seeing it as a major player in the future of AI-driven business tools.

However, even with so many gains under its belt, there are several reasons investors should still be getting excited about Salesforce’s potential in the months ahead. Let’s jump in and take a closer look. 

Salesforce's Strong Fundamental Performance Drives Growth

To start with, there’s the company’s strong fundamental performance. A small miss on earnings at the start of December might stand out as a blemish, but it’s minor when you consider the bigger picture. For the most part, Salesforce smashed expectations with its earnings reports earlier in the year, consistently beating forecasts quarter after quarter.

Even this month’s report saw revenue hit a record high, and on the whole, EPS growth remains impressive. Other bright spots existed in the form of operating cash flow jumping 30% year-over-year, while the company returned $1.2 billion to shareholders through a combination of share repurchases and dividend payments.

Given how well its fundamental performance is trending in the right direction, it’s no surprise that Salesforce shares have been moving higher.

Why Analysts Are Bullish on Salesforce Stock

It’s also worth noting that multiple bullish analyst updates suggest there is still plenty of room for Salesforce to climb. Just this week, the team over at KeyCorp came out swinging with a bullish upgrade, boosting their rating to Overweight from Sector Weight. The reason? They see Salesforce’s artificial intelligence offering, Agentforce, setting the new standard in enterprise management software.

The energy around Agentforce has been resonating strongly with customers, partners, and investors. The KeyCorp team described it as the next evolution of AI and a leap forward from the copilot AI models seen in recent years. While it remains in the early stages, KeyCorp sees this “agentic wave” creating a buzz that could drive share price momentum well before meaningful revenue is realized in 2025.

This bullish call aligns with earlier upgrades from Jefferies, JPMorgan Chase, and RBC, all of whom highlighted Salesforce’s growth runway and AI opportunities. KeyCorp’s price target of $440 will be particularly attractive, given it points to an upside of almost 25% from where the stock closed on Monday. 

Balancing Caution With Bullish Market Signals

Of course, not everyone is fully on board with the bullish outlook. Macquarie initiated coverage last week with a neutral rating, joining Loop Capital and Citi’s stances earlier this month and taking a more cautious stance. After two years of near-continuous rallying, they’re waiting to see whether Salesforce’s potential can materialize more fully before they jump on board. These concerns highlight the need for Salesforce to deliver consistently right from the start of 2025. 

As we head into the last couple of weeks of the year, however, there are way more reasons to be bullish than bearish. Salesforce’s technical setup, for example, is another reason for investors to be optimistic. One of the most telling indicators here is the Relative Strength Index (RSI), a momentum gauge that measures whether a stock is overbought or oversold. At its current reading of 62, Salesforce’s RSI signals bullish momentum without yet being in overbought territory. In other words, there’s still a ton of room to run.

Combine that technical setup with the company’s strong fundamentals, bullish analyst upgrades, and broader market tailwinds, such as the S&P 500 hitting fresh highs and the Fed cutting rates, and Salesforce is offering exactly the kind of outsized reward potential that investors crave.