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A bullish Morgan Stanley reports calls Salesforce.com ( CRM ) the most likely software company to next hit the milestone of a $100 billion market valuation, though it says security firm Palo Alto Networks ( PANW ) is also in the hunt. Salesforce.com, a top provider of cloud-based software-as-a-service, has a market cap of $56 billion, while Palo Alto’s valuation is nearly $13 billion. “With the most customer data in the cloud and multiple solutions targeting over 62 million users, we see Salesforce.com as the clear leader in SaaS-based applications and well on their way to a $100 billion market cap,” Keith Weiss, a Morgan Stanley analyst, said in a research report. Salesforce.com stock has rallied since early February, after plunging at the start of 2016. Salesforce stock was up nearly 2% in midday trading in the stock market today , near 83. Salesforce.com has an IBD Composite Rating of 99, the highest possible. IBD Take: How does Salesforce.com rate a 99 CR? Find out with IBD Stock Checkup. As for Palo Alto Networks, Weiss wrote that “to achieve the revenue scale necessary to become a $100 billion market cap company, Palo Alto must successfully expand their focus from the network security segment to the broader pool of overall security spending.” Weiss says Red Hat ( RHT ) is also well positioned in the cloud market but might not reach the $100 billion valuation mark. It’s now less than $14 billion. As for a couple of other fast-growing SaaS providers, Weiss points to stiff competition. “In our view, the problem with Qlik Technologies ( QLIK ) or Tableau Software ( DATA ) becoming the next $100 billion company is the competitive environment,” he wrote. Salesforce.com will remain strong in SaaS, Weiss says, despite cloud competition from the likes of Amazon.com ( AMZN ), Google parent Alphabet ( GOOGL ) and Microsoft ( MSFT ). San Francisco-based Salesforce.com garners mainly subscription revenue from on-demand software delivered via the Internet cloud. It’s the No. 1 provider of customer relationship software. “With SaaS-based applications’ faster innovation cycles and easier integration of new functionality, it becomes harder for vendors to sustain differentiation and enables (broad product) vendors to garner broader ecosystems and higher market share — as seen by Salesforce.com’s 40%+ share of the sales force automation market,” Weiss wrote. Scalper1 News
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