Cramer's Morning Take: Salesforce 11/30/23

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Jim Cramer (0:28)

I'm Jim Cramer, and you're about to hear a sample taken directly from today's CNBC Investing Club morning meeting.

Jeff Marks (0:40)

Jim, you described it earlier in the week as a flop and chop, still kind of playing out. Every day in the S&P so far this week has kind of been this muted action.

Jim Cramer (0:50)

There's a lot of red, a lot of red on your screen.

Jeff Marks (0:51)

No, absolutely, and we're still kind of digesting the recent rally, S&P oscillator still a little overbought, so some of those dynamics still at play.

Jim Cramer (1:01)

At the same time, we have to recognize the individual situations like Salesforce, which we own, like CrowdStrike, like Palo Alto, which we own, like Snowflake. These are the stocks that today are powering. Now, remember, that's kind of what I used to call a major chord and minor chord, it's a minor chord. The major chord is the rebirth of a lot of, say, the Russell, the Russell 2000

People are looking at these stocks that have been left for dead.

And in the meantime, these are AI, okay? This is just a combination of things which Salesforce had to have, whether it be a MuleSoft, Tableau, Slack. They all came together in the data cloud, which Mark is very good in depth at selling. When people are trying to figure out, look, I gotta get AI. They go to Salesforce and they go to ServiceNow, because those are the companies that they're used to getting answers from.

As someone who used Salesforce, I can tell you they gave me far more answers than just how to sell a sub.

Jeff Marks (1:57)

Yeah, it was a great quarter from Salesforce. I really like this from Morgan Stanley. They called it hitting the trifecta, that being beats across top and bottom line, better than feared Q4, CRPO guidance. That's current remaining performance obligation. That's basically revenues book in the next 12 months. And then more margin expansion and potentially through fiscal year 25, Amy Weaver, CFO in the call, talking about 30% being the floor, not the ceiling.

Jim Cramer (2:23)

That was very important.

Jeff Marks (2:24)

And then they're also talking green shoots and deal environment, which I don't think many saw coming.

Nine of its top 10 deals in the quarter included six or more clouds, 80% increase in deals valued at more than a million dollars, so that's exceeding what management's expectations. So you're having this margin story continue with steady double digit growth.

Jim Cramer (2:43)

It's very interesting to have to fire a huge number of employees and have your revenue soar. That's obviously the whole grail. It means that they did have a lot of people who were not contributing.

I also think that Mark was repeatedly mentioning to me the Amazon Web Services contract. They could pick anybody.

Jeff Marks (2:58)

Yeah, and at the same time, remember they did put in that 9% price increase. That was the first price hike in years, yet you still have attrition still at historic low levels around 8% where it has been quarter after quarter. So that's just a good sign of once Salesforce, once they get their suite of products in there, it's very hard to leave.

Jim Cramer (3:18)

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