Salesforce.com's Cloud Dominance Is Over; Take Profits Ahead of Earnings

NEW YORK (TheStreet) -- Salesforce.com (CRM) may still be regarded as a young cloud darling, but the company is slowly losing out to the traditional software powers -- namely Microsoft (MSFT) . And if Salesforce.com is not careful, it may soon find itself on the outside looking in at a market it once disrupted.

Salesforce.com stock was trading down 1.4% to $62.85 in Monday morning trading. The San Francisco-based company reports fiscal fourth-quarter and full-year 2015 earnings results Wednesday. The shares have gained 5.9% on the year to date, besting the 1.78% and 2.5% respective gains in the Dow Jones Industrial Average (DJI) and the S&P 500 (SPX) .

There are two different stories here, however.

CRM Year to Date Price Returns Chart
CRM Year to Date Price Returns data by YCharts

While Salesforce.com is dominating the broader averages so far in 2015, the stock has underperformed the Dow and S&P 500 for the trailing 12 months. And Salesforce.com is one of the worst-performing stocks in the iShares North American Tech-Software ETF (IGV) -- home to cloud giants like Red Hat (RHT) (up 19% in 12 months) and Oracle (ORCL) (up 14% in 12 months).

The market has begun to realize that companies like Microsoft are gaining ground, even though Salesforce.com grew annual cloud revenue over 33% last year.

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