Please ensure Javascript is enabled for purposes of website accessibility

Salesforce Sends Stock Markets to New Records; Anaplan Sees Good Times Ahead

By Dan Caplinger - Updated Aug 26, 2020 at 12:36PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The tech sector continues to lift major benchmarks higher.

Investors have gotten used to seeing tech stocks act as leaders in 2020's market action, and Wednesday brought more of the same. Even as the Dow Jones Industrial Average (^DJI 0.00%) once again lost ground on weakness in old-economy stocks, other indexes climbed to new records. Shortly after 11 a.m. EDT, the Dow was down 60 points to 28,188. However, the S&P 500 (^GSPC -0.07%) gained 13 points to 3,456, and the Nasdaq Composite (^IXIC 0.00%) soared 113 points to 11,579.

Earnings season is largely behind us, but many companies in the tech arena have fiscal years that don't line up to the usual quarter-end. That's true of (CRM -1.00%), which utterly wowed its shareholders with its financial results late Tuesday. Meanwhile, Anaplan (PLAN) isn't nearly as large or well known as Salesforce, but it also got the same reception to its quarterly report.

Selling software in force

Salesforce shares skyrocketed 27% Wednesday morning, easily leading the S&P 500. The customer relationship management (CRM) software giant got the good news that it would join the Dow Jones Industrial Average on Monday evening, and it lived up to expectations with a solid quarterly report.

Chart of stock prices and data in front of a highway at night.

Image source: Getty Images.

The numbers at Salesforce were encouraging. Revenue was higher by 29% from year-ago levels, easily outpacing the company's guidance for sales growth in the low-20s percentage. Net income was substantially higher year over year, and Salesforce also boosted its projections for sales growth for the remainder of the fiscal year.

Many investors are still excited about Salesforce's long-term prospects. As digitalization efforts continue to accelerate across the economy, Salesforce should see rising demand for its CRM capabilities. Moreover, the tech company has expanded into other niches, giving customers even more to benefit from.

Salesforce will probably see some volatility between now and Monday, when it officially joins the Dow. For now, though, investors have to be happy at the fundamental success the CRM software giant is enjoying.

The company with the plan

Shares of Anaplan also climbed sharply, rising 29%. The connected business and financial planning software company has been publicly traded for just a couple of years, but it's already putting up some impressive numbers.

Anaplan's second quarter was strong, with revenue jumping 26% on a 32% boost to subscription-based sales. Although the company is still losing money, it cut its losses by two-thirds during the quarter compared to the year-earlier period.

Investors also liked Anaplan's expectations for the future. The company sees sales for the full 2021 fiscal year coming in between $437 million and $439 million. That'd be up about 26% from fiscal 2020, and it's above what most shareholders were previously anticipating.

Tech stocks like Anaplan and Salesforce have been helping lift the major benchmarks for months now. If earnings results continue to be as positive as they have been, then investors can expect that trend to continue for the foreseeable future.

Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Anaplan Inc and The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Salesforce, Inc. Stock Quote
Salesforce, Inc.
$186.73 (-1.00%) $-1.88
Anaplan Stock Quote
Dow Jones Industrial Average (Price Return) Stock Quote
Dow Jones Industrial Average (Price Return)
$33,309.51 (0.00%) $0.00
S&P 500 Index - Price Return (USD) Stock Quote
S&P 500 Index - Price Return (USD)
$4,207.27 (-0.07%) $-2.97
NASDAQ Composite Index (Price Return) Stock Quote
NASDAQ Composite Index (Price Return)
$12,854.80 (0.00%) $0.00

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/12/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.