Goldman Sachs Says Buy Massive Software Weakness Now: 4 Top Stock Picks

Salesforce

This company blew away Wall Street with a gigantic $27.7 billion purchase of Slack Technologies. Salesforce.com Inc. (NYSE: CRM) provides enterprise cloud computing solutions, with a focus on customer relationship management to various businesses and industries worldwide.

Salesforce’s enterprise cloud computing applications and platform services include Sales Cloud, which enables companies to store data, monitor leads and progress, forecast opportunities, gain insights through relationship intelligence and collaborate around sales on desktop and mobile devices.

The company also provides Service Cloud, which enables companies to deliver personalized customer service and support, as well as connect their service agents with customers on various devices, and Marketing Cloud, which enables companies to plan, personalize and optimize customer interactions.

Goldman Sachs noted this about this industry giant:

Salesforce remains poised to be one of the most strategic application software companies in the $1trillion+ total addressable market cloud industry, in our view. With a broad and expanding platform that spans sales, service, ecommerce, marketing, BI/analytics, artificial intelligence, custom applications, integration, and collaboration, we view Salesforce as well positioned to capitalize on accelerated digital transformation spending, as enterprises across verticals grapple to form a holistic view of their customers across an increasingly complex customer journey involving multiple touchpoints and channels.

Goldman Sachs has a $370 price target, while the consensus target is $327.34. The final Salesforce.com stock trade for Monday came in at $247.21 a share.

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ServiceNow

This stock had an incredible 2021, but the recent heavy selling is offering investors an outstanding entry point. ServiceNow Inc. (NYSE: NOW) develops and sells a hosted, subscription-based suite of services designed to automate various IT department functions, such as help desk, operations management and change/release management.

The company also sells a number of applications that automate various self-service-related applications outside of the IT department, such as HR onboarding, facilities requests and governance, risk and compliance.

Top analysts across Wall Street remain very bullish on the shares, given the ramping pipeline builds and deal activity in the employee workflow category to support demand for a central platform/portal to manage employee service requests across payroll, benefits, IT support and employee onboarding to support an increasingly distributed workforce during the pandemic. The Goldman Sachs report said this:

ServiceNow’s low-code workflow platform built using a common data model on unified architecture with out of the box APIs that facilitate integration with critical applications, allows for rapid application development. We see the sentiment around the near-term guide underappreciating a business that is potentially entering 2022 with 5 straight quarters of net new ACV momentum, broad-based demand across the product portfolio, a significantly healthier renewal base with improving renewal rates, and a much larger and more productive salesforce that will likely begin to travel in the first half of 2022. ServiceNow is a net beneficiary of the pandemic as its workflow applications can replace human-intensive processes in areas where packaged applications either don’t exist or are cumbersome.

The huge $800 Goldman Sachs price objective towers above the $730.71 consensus target for Service Now stock. Shares closed at $605.37 on Monday.