What happened

Shares of salesforce.com (NYSE:CRM) rose 15.5% in January of 2017, according to data from S&P Global Market Intelligence.

So what

This month-long surge started on Jan. 4, when the company published a "state of the service" report that painted Salesforce's target market in bright, cheerful colors. The momentum continued as several analyst firms issued positive research reports on the stock, often describing it as a probable turnaround winner.

Teamwork in front of a futuristic computer screen

Image source: Getty Images.

Finally, as January wrapped up, rumor had it that Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL) might be preparing a buyout offer for the company.

Now what

Of course, Alphabet has not presented any takeover bid for Salesforce, and I'd be surprised to see it happen. January's burst of share price gains came after a disappointing 2016 as a whole, setting the bar low for quick gains.

CRM Chart

CRM data by YCharts.

Is there a solid turnaround on the horizon? Salesforce does generate plenty of cash, but the stock valuation remains firmly in the nosebleed section. The stock is simply priced for absolute perfection. I'm more than comfortable staying on the sidelines -- but sudden price drops could make Salesforce shares interesting. This one goes on my long-term watch list.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Anders Bylund owns shares of Alphabet (A shares). The Motley Fool owns shares of and recommends Alphabet (A and C shares). The Motley Fool recommends Salesforce.com. The Motley Fool has a disclosure policy.