Salesforce Unusual Options Activity

Someone with a lot of money to spend has taken a bullish stance on Salesforce CRM.

And retail traders should know.

We noticed this today when the big position showed up on publicly available options history that they track here at Benzinga.

Whether this is an institution or just a wealthy individual, they don't know. But when something this big happens with CRM, it often means somebody knows something is about to happen.

So how do they know what this whale just did?

Today, Benzinga's options scanner spotted 12 uncommon options trades for Salesforce.

This isn't normal.

The overall sentiment of these big-money traders is split between 50% bullish and 50%, bearish.

Out of all of the special options they uncovered, 8 are puts, for a total amount of $395,546, and 4 are calls, for a total amount of $188,185.

Taking into account the Volume and Open Interest on these contracts, it appears that whales have been targeting a price range from $180.0 to $240.0 for Salesforce over the last 3 months.

In terms of liquidity and interest, the mean open interest for Salesforce options trades today is 1951.55 with a total volume of 774.00.

In the following chart, they are able to follow the development of volume and open interest of call and put options for Salesforce's big money trades within a strike price range of $180.0 to $240.0 over the last 30 days.

Options are a riskier asset compared to just trading the stock, but they have higher profit potential. Serious options traders manage this risk by educating themselves daily, scaling in and out of trades, following more than one indicator, and following the markets closely.

If you want to stay updated on the latest options trades for Salesforce, Benzinga Pro gives you real-time options trades alerts.

© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

Could UiPath Become the Next Salesforce?

Over the past two decades, Salesforce modernized the customer relationship management (CRM) business by replacing Rolodexes and desktop-based software with cloud-based services. That approach enabled companies to maintain consistent records, compartmentalize and analyze each customer, and scale their businesses more easily.

Between fiscal 2003 and fiscal 2023 (which ended this January), Salesforce's revenue soared from $51 million to $31.4 billion, representing a compound annual growth rate (CAGR) of 38%. Its stock has risen 5,200% over the past 20 years.

Image source: Getty Images.

Salesforce's returns are astounding, but its growth is cooling off as it matures. So instead of sticking with its stock, many growth-oriented investors are already searching for the "next Salesforce," which can carve out a new niche in the software market. Could the robotic process automation (RPA) leader UiPath (PATH 0.72%) fit that bill?

UiPath develops software robots that can be integrated into an organization's existing software applications to automate repetitive tasks like entering data, processing invoices, onboarding customers, and sending out mass emails. By installing those robots, companies can replace their human employees, streamline their operations, and cut costs.

UiPath's first-mover advantage made it the leader of this niche market. According to Gartner, it controlled 34% of the global RPA market in 2021, and it actually expanded its share that year as all of its smaller rivals lost ground.

From fiscal 2020 to 2023 (which ended this January), UiPath's revenue had a CAGR of 47%, from $336 million to $1.06 billion. By comparison, Salesforce generated $1.08 billion in revenue in fiscal 2009. Salesforce subsequently grew its revenue at a compound annual rate of 27% from fiscal 2009 to 2023.

However, analysts only expect UiPath's revenue to show a CAGR of 19% from fiscal 2023 to 2026 as it faces tougher macro and competitive headwinds.

We should take those estimates with a grain of salt, but UiPath's growth has clearly decelerated over the past year. Even though the installation of its RPA tools might help companies reduce their long-term expenses, many of those potential customers have been reining in their software spending to cope with near-term macro headwinds. 

As the market's demand for RPA tools cools off, more competitors -- including Salesforce's MuleSoft RPA, Microsoft's Power Automate, and Appian RPA -- are all creeping into UiPath's backyard.

Salesforce and Microsoft could cause a lot of trouble because they can both bundle their RPA services into their market-leading cloud ecosystems. Both of those tech giants could also integrate more generative AI tools (like OpenAI's ChatGPT and Salesforce's Einstein GPT) to automate more processes and eliminate the need for third-party RPA services.

To make matters worse, UiPath isn't profitable yet, and analysts expect it to rack up between $100 million to $200 million in net losses annually through fiscal 2026. All of that red ink could make it tough to keep pace with the competition.

Like Salesforce, UiPath carved out a niche in the software market with a platform that digitally transformed businesses. But unlike Salesforce, UiPath didn't have the luxury of expanding for years before bigger competitors entered the market.

Instead of creating a brand-new cloud-based platform like Salesforce, UiPath only created automation bots that can be integrated into a company's existing software. Tech giants like Microsoft and Salesforce might be eager to purge those third-party bots from their platforms, while their clients might prefer to use their first-party automation tools instead. 

Based on all these facts, I don't think UiPath will evolve into the next Salesforce. It might still have room to grow, since Fortune Business Insights estimates the global RPA market will still have a CAGR of 23% between 2022 and 2029. But it's far too early to declare that it can expand out of its niche and evolve into a tech giant.

Leo Sun has positions in Salesforce. The Motley Fool has positions in and recommends Appian, Microsoft, Salesforce, and UiPath. The Motley Fool recommends Gartner. The Motley Fool has a disclosure policy.

Salesforce CEO shares his predictions for AI and the future of work

SAN FRANCISCO -- Salesforce founder and CEO Marc Benioff has become something of a vanishing breed during the nearly quarter century he has been running the company that pioneered the concept of selling software as an online subscription. While Benioff remains in charge at Salesforce, other billionaire founder/CEOs such Amazon's Jeff Bezos, Google's Larry Page and Netflix's Reed Hastings have all stepped away from groundbreaking companies born during the 1990s.

Benioff, 58, isn't ready to leave Salesforce yet, even though he has amassed an $8 billion fortune and just went through a challenging stretch that might have caused many CEOs to head for the exit. In January, Benioff decided to lay off 8,000 Salesforce employees after overseeing a pandemic-driven expansion that included a nearly $28 billion acquisition of the popular workplace tool Slack and then grappled with an investor backlash triggered by a nearly 50% drop in the company's stock price last year. The shares have recovered most of their losses so far this year on the strength of a revived revenue growth.

The Associated Press recently sat down with Benioff for an interview that has been lightly edited for clarity.

A: When I look back at 2019, they had really gone through three huge waves of technology: cloud computing, mobile and social. And now they are going into the fourth wave, which is probably the most important one in AI (artificial intelligence), which is not just the most important technology of their lifetime, but probably the most important in any lifetime. It’s going to be a new world of technology that’s as exciting as all the other worlds put together.

A: Technologies are never good or bad, it’s what they do with them that matters. Nobody wants a Hiroshima moment to understand how dangerous AI is. They want to be able to kind of get their heads around the tremendous consequences of the technology that they are working with. And that’s going to require a multi-stakeholder approach — companies, governments, non-governmental organizations and others to put together the guidelines for this technology.

A: They are moving from the generative ChatGPT phase, which is phase one, into a stage where they are about to see agents that are quite alive and aware and able to take these kinds of massive actions. These are called multimodal agents, that is they can move from text to speech to video. And then they are going to move into something that is maybe more multisensory, where these agents are going to be more aware of us and they are going to be more aware of them.

None of us are really ready for this because none of us have had this experience before. They are on the threshold of a dramatic change in the way they work with computers. They are going to work side by side with them. And, in many cases, they are going to augment or extend what they have been doing. They are going to be taking actions without their knowledge.

A: They are all using technology to find more freedom in their lives. Things are back to normal, but people do go to the office less. And that is not going to change. They are never going back to they way it was.

A: Companies were too optimistic, including ours. And they unfortunately had to make adjustments, some that they did not want to make. I think everyone got hypnotized during the pandemic that that was what the future was going to look like. And when the pandemic was over, there was a snapback.

A: I think about my career every day, but I have never been more excited about the future of the industry and the potential to help all their customers. This technology revolution that is going on in artificial intelligence and the importance of bringing trust to AI is a real call to arms.