What happened

Shares of Salesforce (CRM 1.28%) climbed higher on Monday, rising as much as 4.7%. When the market closed, the stock was still up 3.4%.

There was a broad updraft that fueled gains for a wide assortment of stocks, but the software-as-a-service (SaaS) pioneer gained ground despite a somewhat lukewarm assessment by a Wall Street analyst.

So what

Northland analyst Nehal Chokshi initiated coverage on Salesforce with a market perform (hold) rating, while simultaneously issuing a $150 price target. To give that context, it represents potential gains of just 5% compared to the stock's closing price on Friday. 

The analyst dug into the customer relationship management (CRM) specialist and came away with mixed thoughts. Chokshi's analysis led him to conclude that Saleforce's sales and service clouds -- the company's two largest cloud platforms -- have generated six consecutive quarters of 15%+ growth, in constant currency and excluding acquisitions. He attributes this performance to the company's Customer 360 view, which he sees as a "sustainable differentiator."

Unfortunately, Chokshi also likens the company to former high fliers including HP Enterprise, Dell Technologies, IBM, VMware, Cisco Systems, and Oracle -- and the comparison is an unfavorable one. These companies lost their edge by "buying brands rather than technology," which he argues results in "just modestly above market growth rates."

Now what

"Those who don't learn from history are doomed to repeat it," or so the old saying goes. However, to conclude that Salesforce will follow the same path as these erstwhile tech titans might be a bit of a stretch.

Since mid-2018, Salesforce has forked over nearly $50 billion to acquire Slack, Tableau, and MuleSoft, and has expanded their revenues by 1.4 times, 1.5 times, and 6 times, respectively, according to the company's calculations. In fact, the longer the time frame since the acquisition, the more likely sales have grown significantly, which illustrates a fairly successful acquisition strategy. 

The analyst's take also ignores the potential within Salesforce's other small but growing cloud offerings -- the marketing and commerce clouds, the data cloud, and the Salesforce platform and other clouds -- each of which has generated notable growth over the past several years. 

Given the company's history of market-beating gains, I'd submit it's too soon to count Salesforce out.