JPMorgan appears to be getting a little nervous about Salesforce ahead of earnings

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Analyst Mark Murphy maintained his buy rating on the cloud-based software company, however.

J.P. Morgan is removing Salesforce from its list of top stock picks after the stock's AI-driven boom so far this year. The move comes before the Dow Jones Industrial average member reports earnings after the bell Wednesday. Analyst Mark Murphy noted that although J.P. Morgan still sees valuation upside, the firm views its outperformance and other sluggish metrics as a potential near-term drag on the stock.

" He pointed to sequential degradation in the company's Software-as-a-Service earnings and muted second-quarter bookings expectations, based on a proprietary vendor survey by JPMorgan. Risks to its current price target include potential continued deceleration in billings growth and future competition from legacy vendors, although Salesforce has already proven to grow partially at the expense of companies such as Oracle and Microsoft.

 

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