Whatâs Going On Here?Salesforceâs earnings punched past analystsâ expectations late last week, with demand for its cloud software looking as strong as ever. What Does This Mean?Companies around the world continue to clamor for cloud-based software solutions, even as many of the planetâs economies reopen in some shape or form. So much so, in fact, that cloud specialist Salesforce says its clients arenât just the most optimistic theyâve been since the start of the pandemic right now â theyâve also restarted large-scale investment in software upgrades.
Many of the companyâs clients expect at least some of their workers to remain remote indefinitely, with sales calls via teleconference also likely to continue being a thing. And thatâs making Salesforce feel good about the future: it upped its sales estimates for the remainder of the year ahead of what analysts had penciled in. The companyâs share price proved to be far from an immovable object as a result: investors initially sent Salesforceâs stock 6% higher on Friday. Why Should I Care?The bigger picture: No cloud cuckoo land.
Cloud computing appears to be here to stay: the pandemic, after all, has forcibly removed any lingering reluctance companies had regarding the movement of mission-critical work online. Leading research firm Gartner now expects global cloud computing revenues to increase 23% this year. Thatâs up from its forecast of 18% growth just a few months back â and more than double the rate at which the industry expanded in 2020 (tweet this).
For markets: Salesforce on sale?
Despite the positive outlook and Fridayâs bump, Salesforceâs stock still hasnât risen as much as the broader US stock market this year. Analysts at investment bank Morgan Stanley reckon nowâs a good time to buy in: the thinking is that a leading firm in a sector thatâs expected to see consistently strong demand over the coming years wonât stay cheap for long. | 