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 salesforce.com (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.
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.