Goldman Sachs recently added two tech stocks to its Conviction Buy list: Microsoft (MSFT) and Salesforce.com (CRM).

MSFT

Kash Rangan, an analyst with Goldman Sachs, recently upgraded MSFT from Buy to Conviction Buy. There is a meaningful difference between these ratings as the upgrade was recognized by the mainstream media. Rangan has set a price target of $315 for MSFT. The stock is currently trading at around $234. If Rangan’s prediction were to come true, MSFT would spike by more than 35%.

MSFT has a POWR Ratings grade of B, meaning it is a Buy. MSFT has an A grade in the Sentiment component of the POWR Ratings along with B grades in the Quality and Stability components. You can find out how MSFT fares in the Momentum, Value, and Growth components by clicking here.

Of the 113 publicly traded companies in the Software – Application space, MSFT is ranked 16th. Click here to find out more about this industry. A total of 31 analysts have studied MSFT in-depth, establishing an average target price of $273.43. If this prediction comes to fruition, MSFT will have popped by more than 20%. Of the 35 analysts who have issued recommendations, 16 consider MSFT a Strong Buy, 15 consider it a Buy, and four-view it as a Hold.

MSFT has a forward P/E ratio of 31.85. Though a forward P/E ratio over 20 is slightly concerning, an exception can be made for MSFT as it has its metaphorical fingers in nearly every tech pie and also has explosive growth potential.

Though MSFT did not acquire TikTok as planned, the company isn’t struggling in the slightest. MSFT’s latest quarterly results are highlighted by $43 billion of sales across the prior three months. This figure represents a 17% hike from the same quarter in the prior year. It is particularly interesting to note MSFT enjoyed more than 20% growth from nearly half a dozen services and products including its cloud-based Azure business, its Xbox video game console, Office 365, and server products/cloud services.

CRM

CRM is clearly benefiting from the transformation in spending that is shifting toward the digital realm. Rangan notes spending on the overarching digital transformation is likely to outpace aggregate IT budgets for years to come. Such spending has greatly increased since the start of the pandemic. If this trend holds steady, CRM will rake in even more cash.

CRM has a POWR Rating grade of B along with Bs in the Sentiment and Growth Components. You can find out more about CRM’s performance in the remaining POWR Rating components by clicking here. Of the 61 stocks in the Software – Business category, CRM is ranked 9th. Click here to find out more about the stocks that comprise this industry.

The analysts are extremely bullish on CRM, setting an average price target of $275.63. If CRM reaches this price, it will have popped by nearly 30%. The analysts’ high target price for the stock is a whopping $336. Of the 42 analysts who have issued recommendations about CRM, 14 view it as a Strong Buy, 19 consider it a Buy, eight consider it a Hold and none view it as a Sell or Strong Sell.

The bullish sentiment for CRM is slightly tempered by its somewhat lofty forward P/E ratio of 61.76. Though CRM is a high-flying tech stock, this elevated P/E ratio should provide investors with a pause as it indicates the stock might be slightly overpriced at the current moment. However, CRM is currently trading $60 away from its 52-week high of $284.50 so there is clearly room for it to run even higher.