5 ETFs To Tap On Salesforce.com Historic Rally

salesforce.com (CRM - Free Report) was a star performer in Wednesday’s trading session, as the stock soared more than 26% to a record high, following its robust fiscal second-quarter earnings results and an upbeat outlook. The share price gain represents the best one-day performance ever.

Quick Insight Into Earnings

Earnings per share came in at $1.44, outpacing the Zacks Consensus Estimate of 67 cents and improving 118% from the year-ago quarter. Revenues climbed 29% year over year to $5.15 billion and edged past the consensus mark of $4.9 billion.

The cloud-based customer relationship-management company raised its revenue guidance from $20 billion to $20.7-20.8 billion for fiscal 2021 and earnings per share guidance to $3.72-$3.74 from $2.93-$2.95. Both guidance figures are well ahead of the Zacks Consensus Estimate of $20.05 billion for revenues and $2.97 for earnings per share. This is primarily driven by coronavirus-spurred demand for its online business software that supports remote work and commerce.

Impressed by solid earnings results, many Wall Street analysts raised the price target on the enterprise software maker. This has spread optimism into the company’s future growth story as well as the software industry.

Other Software Stocks Joined Rally

The historic rally of salesforce.com pushed other software stocks higher. Some of the biggest gainers are Zuora (ZUO) – up 11.3%, WorkDay (WDAY) - up 10.1%, Coupa Software Inc. (COUP) - up 10%, Adobe (ADBE) – up 9.1%, Okta Inc. (OKTA) - up 7%, ServiceNow Inc. (NOW) - up 6.5%, Smartsheet Inc. (SMAR) – up 6.5%, Splunk Inc. (SPLK) - up 6.4%, Twilio Inc. (TWLO) - up 6.2%, Atlassian Corp. (TEA) - up 6% and ZenDesk Inc. (ZEN) - up 6%.

Solid Fundamentals

salesforce.com has been on a winning streak lately on the announcement that the company will join Dow Jones Industrial Average, replacing oil giant Exxon Mobil (XOM - Free Report) effective Aug 31 before market open. Additionally, Salesforce is positioned to benefit from the digital transformation megatrend. It has emerged as a leader in areas such as data aggregation, integration and visualization.

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