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Salesforce and Visa reached new 52-week highs on Thursday. Are they approaching the peak of their gains?

On Thursday, Salesforce (CRM) and Visa (V) rode the wave of the broader market surge, each reaching new 52-week highs. Well-positioned in their respective markets, can these two stocks continue their momentum in 2024?

Salesforce Boosted With Wall Street Upgrades

Cloud-based software provider Salesforce touched a new 52-week high on Thursday, a new milestone to crown the company’s impressive 2023 performance. The stock closed at $274.46, its highest point since November 2021.

With a year-to-date surge of nearly 100% last year, Salesforce has been capitalizing heavily on the ongoing expansion in the AI sector. Most of these gains came since November, when the company reported earnings and revenue that beat analysts’ estimates. 

Moreover, the software maker also raised its fiscal 2024 forecast for operating cash flow growth from 30% to 33%. In Q4, it expects revenue to grow by 10%. 

Strong 2023 performance and bullish outlook have led to a series of stock upgrades by Wall Street giants. Last week, analysts at Baird upgraded Salesforce to Outperform and set a new price target of $300 on the stock, implying an upside of more than 9.4% from Thursday’s closing price. 

Oppenheimer and Bank of America also expressed confidence recently, with the latter naming Salesforce a top pick for 2024. If shares stay above $270, a new support level may set the stage for bulls to attack $300 in the short term.

Meanwhile, the consensus 12-month price target for Salesforce currently sits at $262.36, suggesting a slight downside, according to MarketBeat data. 

Visa Stock Hits All-Time High, What’s Next?

Another large-cap stock that caught attention on Thursday is Visa, one of the two biggest payment processors in the world. The stock closed 0.58% higher at $268.14, a new all-time high.

At the current valuation of $539 billion, Visa has a price-to-earnings ratio of 32.3, which may seem high initially. However, it represents a slight discount compared to the stock’s trailing 10-year average of 33.7, indicating a positive trend. 

If this valuation remains constant and the share count remains unchanged, the company must achieve diluted earnings per share (EPS) of $15.60 by 2030 for a $1 trillion market cap. This implies a compound annual growth rate of less than 10% over the next seven fiscal years (2023 to 2030).

Given its strong competitive position, financial stability, and the ongoing shift towards cashless transactions, Visa stands a decent chance of becoming a trillion-dollar company by 2030. 

While the annualized growth in diluted EPS is expected to slow down from the past decade’s rate of 15.9%, a conservative estimate still supports reaching the trillion-dollar valuation. Overall, it appears probable that Visa will join this exclusive valuation club by the decade’s end.

Can Salesforce achieve another 100% gain in 2024? Let us know what you think in the comments below.

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