News and analysis

Investors never feel fully satisfied with their takes but I am very close to this feeling of contentment in high spirits when watching at my mid-term targets clearly transcended in Salesforce positions. In fact, the current state of my stakes in this giant cloud platform creator for enterprises exceeds my wildest expectations. Initially I projected a maximum profit level up to 30%, betting on a moderate breakthrough just above the previous historical high around $317 per share. Being bought a bit below $255 in late August, it can be sold at $360 or even higher now, which would provide me with over 42% of net income in approximately three months. I am going to accept this opportunity, as there are seemingly no fundamental grounds behind much higher price goals.

The stock's value grew in a period between two solid quarterly reports and then it has gained a more than 12% of additional momentum on raising the lower end of its 2024 full-year revenue forecast and a fiscal 2025 profit guidance, despite the company's Q3 earnings fell slightly short of Wall Street estimates. Salesforce announced EPS of $2.41 on revenue of $9.44 billion vs analyst poll preliminary numbers for EPS at $2.44 on revenue of $9.35 billion. Of course, the uptrend in revenue persists, while the business has a 14% surplus in EPS year-on-year, but the previous two quarters were better in absolute numbers of EPS, i.e. $2.44 and $2.56 respectively. For the current quarter, Salesforce guided EPS varying in a range of $2.57 to $2.62 on revenue in the range of $9.90 billion to $10.10 billion, with an annual range for EPS between $9.98 and $10.03 in 2025 and a revenue guidance between $37.8 billion to $38.0 billion, compared with a prior inner estimate of between $37.7 billion to $38.0 billion.

This difference is surely pleasing to the eyes but is not a pure delight. The forecast may additionally cost a one-off double-digit percentage gain but hardly could provide much more on a regular basis. I mean, Salesforce is now worth the higher price the market indicates, yet the fast move may also deserve some correction soon. It gapped up on the hype around the company’s AI feature, named Agentforce and being able to perform many useful corporate tasks autonomously. Salesforce said that its Agentforce closed over 200 deals in just one week and it needs to hire 1,400 employees in the current quarter to support the growing demand. Yet, the company's price to earnings ratio is now even higher than with some of the “Magnificent Seven” tech stocks valuation.

I love the company, as it brought me much profit and joy, but it doesn’t excite me anymore. Therefore, I will sell a half of my stake in Salesforce at current price levels, and put a stop loss order just below $255 per share for the second half of the stake. It will be some kind of a tribute to recently raised price targets on the stock from $390 to $440 by several big investment banks like the Bank of America, RBC Capitals or Stifel. "Q3 results suggest that the company is leading the way in an agentic AI cycle with Agentforce," analysts at The Bank of America said, while emphasizing "meaningful customer interest" for "this emerging product cycle", which "is not derailing margin expansion".

If these reputable institutions are thinking right and better than me on target updates for CRM, I would be happy as well by earning more money on the rest of my old buy position. Meanwhile, RBC Capital raised its target to $420 but also expressed some caution, suggesting that "the market's expectations might be outpacing the near-term reality for the company". Again, it was Salesforce's own CFO, Amy Weaver, planning to step down after four years in the role, who recently admitted that it may still be early for Agentforce to contribute significantly to the company's financials.

EOS has surged by 23.7% to $1.3319, pulling back from a high of $1.5390 earlier this week—the highest level since September 12, 2022. The ongoing rally in the altcoin market has been a key driver of this upward momentum. A major catalyst was the announcement of Paul Atkins, a known crypto advocate, as the nominee for the Securities and Exchange Commission (SEC) by U.S. President-elect Donald Trump. This news propelled the entire crypto market, with Bitcoin (BTC) climbing 8.8% to a new all-time high of $104,498. EOS followed suit, spiking by 36.3% in response.

However, the sharp increase has left EOS in overbought territory, suggesting a potential retracement to around $1.1000 before any further upward movement. Such a pullback could provide a healthier foundation for sustained gains.

BlackRock's dominance in the global asset business got another confirmation. The institution, which has roughly $11.5 trillion worth of funds under management currently rules a $85 billion private credit platform as of the end of September, yet it is ready to buy one more private credit firm, named HPS Investment Partners, for about $12 billion in an all-stock deal, BlackRock CEO Larry Finksaid and HPS CEO Scott Kapnick said this week. Shares of BlackRock reached the levels above $1,050 on this news, as HPS is a bigger private credit player, with its assets under management evaluating at about $148 billion. Initially being founded in 2007 as a hedge fund unit of JPMorgan's asset management arm, the firm has quickly grown over the past few years, from nearly $34 billion in 2016.

HPS was reportedly approached by a number of interested institutions, which offered acquisition or merger instead of entering into IPO, but BlackRock came out the winner. The entire private credit class of assets is now estimated above $1.5 trillion, and it may grow to $2.6 trillion in the next 5 years, according to average analyst pool projections on Wall Street. Even though BlackRock's rivals Apollo, managing $598 billion in credit assets, Blackstone ($432 billion) and Ares ($335 billion) are still commanding bigger strides in this credit platform speciality, the deal will clearly strengthen BlackRock positions here by creating a private credit franchise with about $220 billion in client assets. According to some estimates, this may increase BlackRock's private markets fee-paying assets under management and management fees by 40% and about 35%, respectively.

As an investment institution, BlackRock previously emphasized that an expanding credit division could be its "primary growth driver" within alternative solutions in coming years. As CEO Larry Fink noted, the HPS deal helps to "deliver income solutions for our clients that blend both the best of the public markets and the best of the private markets". This "positions BlackRock to offer comprehensive alternative asset management portfolio services to the largest institutions in the world ... significantly advancing its private-market growth goals," Ana Arsov, global head of private credit at Moody's Ratings commented.

Many investors think in a similar way. As we saw BLK aiming for new mountains since the very beginning of 2024, now we can update our price target for $1,150 at least. When BLK share price was just a bit above $800 in early January, the pool of Wall Street analysts put their average target at $877, and it adjusted to $1,090 at the moment. A 30% price growth for the last 11 months looks like a reason to expect even better price dynamics. It seems that declining borrowing costs in both the U.S. and Europe along with the Christmas rally have a potential of another 3% to 5% increase for the leaders of the investment segment right in the coming weeks.

Ethereum Classic (ETC) is up 11.5% this week to $36.88, outperforming the broader market as Bitcoin (BTC) slips 1.1% to $96,678. The altcoin rally remains robust, with ETC surging 10.8% on Wednesday alone, marking a remarkable 97.3% gain since early November.

ETC is now approaching the ascending channel resistance at $40.00, which may act as a pivotal level. While a price spike beyond $40.00 is possible, sustained movement above this resistance is necessary for further upside to $45.00. Without significant positive developments within the Ethereum Classic project, such an advance may lack staying power, increasing the likelihood of a correction back toward $35.00.