Key Points
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Salesforce had a solid decade with shares rising from about $70 per share to more than $240.
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The S&P 500 has been so slouch, either.
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What matters most is how well Salesforce will do from here on out.
- 10 stocks we like better than Salesforce ›
Salesforce had a solid decade with shares rising from about $70 per share to more than $240.
The S&P 500 has been so slouch, either.
What matters most is how well Salesforce will do from here on out.
Imagine it’s 2015. You’ve just gone to the movies to see Inside Out, and you’re playing with Snapchat filters on your phone. You’ve also just bought $1,000 of shares in Salesforce (NYSE: CRM). Flash forward to 2025. How much is your stake worth now?
Here’s the answer: $3,470. Pretty great, right? You’d have enjoyed an annualized return of 13.2%. Given the S&P 500 has delivered an annual long-term return close to 10% (ignoring inflation), that 13.2% beats the market’s historical average by a wide margin.
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But the S&P 500 has had a much stronger decade with an annualized gain of 12.9%, nearly matching Salesforce’s performance.
Image source: Getty Images.
If you’d reinvested your dividends from your S&P 500 investment, you’d actually have come out ahead with an annualized total return of 14.9%, enough to turn $1,000 into just over $4,000. (Salesforce only began paying dividends in 2024.)
Still, this is all water under the bridge. What really matters is where Salesforce stock goes from here. Its current valuation certainly looks appealing with a forward price-to-earnings (P/E) ratio of 21, well below its five-year average of 27.
That valuation reflects a stock price that has fallen 27% year to date, due in part to less-than-inspiring guidance from management and worries the business may be hurt by artificial intelligence (AI) — or at least the fear Salesforce won’t be a leader with the technology.
Take a closer look at the company to see if it looks promising enough to deserve a place in your portfolio.
Should you invest $1,000 in Salesforce right now?
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Selena Maranjian has positions in Salesforce. The Motley Fool has positions in and recommends Salesforce. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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