November 19, 2010, 5:47 PM — The Street is loving Salesforce.com.
One day after posting solid third-quarter results, shares of the enterprise cloud-computing vendor soared 20.97, or 18.1 percent, to close Friday at 136.74. Add that on top of Thursday's gain of 5.62, and Salesforce.com (NYSE: CRM) has gained 24.1 percent in two days.
(Also see: Salesforce.com shares jump after Q3 report)
The stock's previous high close was 123.14 on Sept. 20. Salesforce.com shares are up 86 percent in 2010.
So what's behind the latest surge? After all, while the company's Q3 revenue of $429 million easily topped consensus estimates of $410 million, its earnings of 32 cents per share barely exceeded forecasts of 31 cents per share.
Well, the company's outlook for the fourth quarter certainly stoked enthusiasm. Salesforce.com said Thursday it expects revenue of $447 million to $449 million, well above analyst estimates of $425 million.
The stock also benefited from sweeping target-price upgrades. As MarketWatch reports, roughly "87% of the brokers covering the stock boosted their price targets on Friday. This lifted the median target price on the shares to $138 from $120, with a range of targets between $95 and $155 a share."
The real driver, though, may be general bullishness about enterprise cloud computing. It's expected to become huge, and Salesforce.com is the pure-play leader in that sector. What's not to like about that from an investor's viewpoint?
Chris Nerney writes about the business side of technology market strategies and trends, legal issues, leadership changes, mergers, venture capital, IPOs and technology stocks. Follow him on Twitter @ChrisNerney.