In the beginning, when we were still buying our software on CDs and had to upgrade them every year or two, we never would’ve guessed that there could be a better solution. Back then, we also saved and exchanged our data on CDs.

Some of us may have been sophisticated enough to use VPNs. That’s all ancient history because we did find a better way — the cloud.

Salesforce.com (NYSE:CRM) was the original company that made the cloud mainstream. Now the whole world is using it or is striving to migrate to it.

In its early days, CRM stock was the “David” bravely competing against the Goliath-like Microsoft (NASDAQ:MSFT) for cloud dominance, and it won! Now, Salesforce.com has 35,000 employees and dominates the field.

For the past decade, CRM has maintained an unparalleled neck-breaking growth pace. All this happened because of the aggressive leadership of CEO Mark Benioff.

Wall Street ate it up and the company’s market capitalization grew to $122 billion, which is almost three times that of say General Motors (NYSE:GM).

Last year CRM stock rose to new highs but then fell 25% into the Christmas market-wide correction. Since then it has had a V-shaped rebound. Now it is again close to setting a new all-time high.

So is it too late to buy it? No.

Before 2018, traders complained of the lack of volatility. As they say, be careful what you wish for because 2018 brought fear in droves. Investors had to contend with waves of bad headlines from tariff wars to a combative U.S. Federal reserve.

This year we’ve had a reprieve from those inflammatory headlines as politicians are now more likely to resolve the issues that plagued us last year. So now companies are free to flourish in these favorable macroeconomic conditions. Yes, in spite of all the fear mongers, things are conducive for growth.

CRM is still cranking on all cylinders. It generates $3 billion in operating cash flow. The results from the last earnings report said so. But don’t take my word for it, this is consensus on Wall Street. The stock is up nearly 50% in the past year.

Furthermore, almost all of the analysts that cover it rate Saleforce.com stock as a buy. Yet, it still trades well below their average price targets, so there is more room to go. Roughly 10% more upside, to be exact.

All this good news comes at a cost. Critics question CRM’s valuation and rightfully so. A three-digit price-earnings (P/E) ratio is extravagant … except that it’s not in this case. When I analyze a hyper-growth stock like CRM or Amazon (NASDAQ:AMZN), I don’t judge it by its profitability …

For as long as it continues to grow as fast as this, it’s doing its job. Growth companies are supposed to overspend in order to grow. Only when they make the turn to a mature stable corporation than will I judge its P/E levels. CRM stock is not there yet.

Bottom Line on CRM Stock

So then the decision to buy it or not comes down to timing. CRM is a momentum stock and those are tough to trade because “momo” stocks don’t give us a clear spot to buy. They move so fast they seem perpetually ready to flip, thereby scaring most investors out of investing.

This has been the case for a lot of investors who have missed out on the upside while they wait for a perfect time to buy it. Sometimes the advice to buy low and sell high just isn’t the right thing to do. Here you have to buy high and sell higher.

Being long these shares, I know there will be bad times. But a bet on Salesforce stock is a bet on the broader markets … if the equity markets are higher years from now, then CRM stock will be higher as well.

As a general rule, it is better to take small bites and not swallow the whole meal at once. This is especially true when we have politicians bickering over tariffs and budgets. So while the fundamental are hostage to headlines for the next few months, I take my positions in tranches. So if the trouble hits the fan then I can add to the position at lower prices.

— Nicolas Chahine

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Source: Investor Place