Goldman Sachs has named tech stocks it expects to be more profitable over the next two years. The Wall Street Bank said it has seen a shift in corporate executives’ mindset from prioritizing growth to profitability. This includes efforts to cut jobs and reorganize sales and marketing, according to Goldman analysts. Goldman Sachs believes that much of the margin expansion is yet to come as companies begin to realize the full benefits of the cost-cutting measures implemented in the first half of 2023. The table below highlights. The five Goldman stocks with the biggest price gains are expected to benefit from the above factors. Salesforce Salesforce, the tech giant that provides customer relationship management, is making significant changes to its operating model that are expected to support the company’s profitable growth, according to Goldman. . The investment bank expects the company’s margins to grow 5.5 percentage points in 2023, reaching 28%. The bank also recognizes Salesforce’s commitment to shareholder returns, as demonstrated through its $20 billion share buyback program. Goldman Sachs analysts led by Gabriela Borges said: “Making strides towards these efforts in a time of broader demand decline could help the company benefit from effective market access. The market improved at the same time business activity started to recover.” to clients on June 19. Goldman analysts think Salesforce’s stock has more than 50% upside potential. Monday.com Monday.com, a software company that aims to improve efficiency between teams, is also expected to improve its financial performance. The company recently increased operating profit to two years and is committed to generating free cash flow. “As total revenue remains steady and macro pressures focus on slower expansion rates, Monday.com is well positioned to increase its focus on expansion in its existing base (a more cost-effective market approach) as the macro improves,” Goldman analysts said. Vertex Vertex, a tax software provider, is expected by Goldman Sachs to see a 4.2 percentage point increase in operating profit margin between 2022 and 2024. The investment bank believes some of the changes the company sees The company has taken on its operations to help improve margins in the near term and has not yet been fully reflected in consensus estimates. “We consider this to be one of the rare stories in the software sector where there are significant short-term, structurally favorable headwinds across the operating cost categories,” the analysts wrote. performance and gross margin that we believe are being missed by consensus.” According to Goldman Sachs, Guidewire Guidewire, a platform for property and casualty insurers, could see profit margins increase significantly as initial investments in cloud infrastructure begin to blossom. fructification. The investment bank has forecast that Guidewire’s gross margin could grow from 49% in 2022 to 60% in 2025. “Over the same time period, we expect a total [annual recurring revenue] will grow from $664 million to over $1 billion, as GWRE continues to enjoy a strong competitive position and high win rate,” the analysts said, referring to Guidewire’s ticker GWRE. Procore, a provider of construction management software, has increased its focus on According to Goldman, cost discipline and profitability over the past few quarters. for stocks with a different underlying flexible story because investors tend to reward companies that exhibit a healthy balance between strong revenue growth and improved margins,” the analysts said. added analysis — Michael Bloom of CNBC contributed to this report.