Tech Stock Disappoints, Bank Excels

Two stocks within the investment portfolio are drawing attention this Monday: Salesforce in enterprise software and Goldman Sachs in banking. Let’s delve into the details.

Salesforce (CRM): Divergent Views on Future Performance

Ahead of Salesforce’s quarterly earnings report slated for next month, Bank of America revised its price target downward to $305 from $325, while maintaining a “Buy” rating. The analysts cited the compression of valuation multiples across the software sector as the primary driver for the adjustment. Their analysis suggests that tempered expectations and a generally bearish investor sentiment surrounding Salesforce could limit downside risk at the current trading levels. BofA anticipates Salesforce’s fiscal 2026 third-quarter revenue and current remaining performance obligations (RPO) to align with consensus estimates, projecting stable performance in the company’s core business and increased adoption of Agentforce solution.

Deutsche Bank analysts echoed a similar sentiment, forecasting an “uneventful” quarter when Salesforce reports on December 3rd. In a recent note, they conveyed that Salesforce, following its Investor Day held alongside the Dreamforce conference, presented “as compelling of a story as we could expect.” Deutsche Bank reaffirmed its “Buy” rating and a price target of $340.

However, opinions are not unilaterally bullish. Concerns have surfaced regarding the potential impact of generative AI on Salesforce’s core platform, which operates on a seat-based model. The argument posits that the rise of generative AI solutions could cannibalize Salesforce’s traditional offerings. While Salesforce projected an ambitious $60 billion in annual revenue by 2030 at Dreamforce, some analysts believe that this timeline is excessively long from an investor’s perspective, making it a “show-and-prove” situation for the company to execute its projected vision.

The market reflects this uncertainty, with Salesforce shares down over 29% year-to-date. The critical challenge for Salesforce remains in demonstrating tangible progress in integrating and monetizing its AI investments, while navigating potential disruption to its existing business model.

Goldman Sachs (GS): Dominating the M&A Landscape

Goldman Sachs is on track to achieve its strongest annual performance in mergers and acquisitions (M&A) in nearly a quarter-century, underscoring its strategic positioning and execution in the investment banking sector. According to data from LSEG cited by the Financial Times, Goldman Sachs has captured a commanding 34% share of the deal value of the $3.8 trillion in global M&A announced year-to-date in 2025. This represents a significant increase from the 28% share the firm held in the previous year.

Further solidifying its position, Goldman Sachs is advising Cidara Therapeutics on its $9.2 billion acquisition by Merck. This deal is poised to propel the investment bank beyond M&A levels not witnessed since 2001. The increase in Goldman’s market share reflects both a general market recovery and specific large-scale transactions where Goldman has played a pivotal role.

Notably, as the sole advisor on the $55 billion take-private transaction of video game giant Electronic Arts, Goldman Sachs is expected to earn a substantial fee estimated at $110 million, marking the firm’s largest M&A deal fee in history. The success in deal-making underscores Goldman Sachs’ ability to navigate complex transactions and capitalize on favorable market conditions.

Goldman Sach’s strong 2025 performance – up nearly 35% year to date – and better-than-expected quarterly earnings reports reflect its success in capitalizing on the resurgence in Wall Street dealmaking. The crucial question moving forward is whether Goldman Sachs can continue its dominance through the shifting macroeconomic conditions and evolving regulatory landscape.