Salesforce Pops After Winning Over Skeptic (NYSE: CRM) shares rallied up $2.54 a share, or 5 percent, to within a dollar of a new 52-week high Friday after Wedbush Morgan analyst Michael Nemeroff upgraded the on-demand software provider’s stock from an “underperform” rating to “neutral.”

Nemeroff, in a research note Friday morning, said he finally has come around and changed his recent negative stance on shares after the company detailed its ambitious expectations for the new Service Cloud 2 offering.

CEO Marc Benioff told analysts that he expects Service Cloud 2 and its improved focus on customer service management will be the company’s next billion-dollar market, driving revenue and profits for the next few years.

Nemeroff said his previously tempered expectations for the stock were a direct result of concerns about decelerating revenue and profit growth in the past year. He says those fears have been assuaged by a “very achievable consensus bar over the next few quarters.” He added that the new Service Cloud offering has had success in partially offsetting weakness in the company’s core salesforce automation segment.”

With Nemeroff’s upgrade, 15 of the 31 analysts tracking and reporting on’s stock maintain a “hold” or “neutral” recommendation. Another 14 analysts rate it a “buy” or “strong buy” and two are advising their clients to sell the stock.

Last quarter, posted record second-quarter results, earning $21.2 million, or 17 cents a share, on sales of $316.1 million. The company added 3,900 new customers, bringing its total customer count to more than 63,000 subscribers.

Analysts surveyed by Thomson Financial expect the company to earn 16 cents a share on sales of $324 million in the third quarter, up from a profit of 7 cents a share on sales of $277 million in the same quarter last year.

The stock tumbled to a 52-week low in November of last year when it was trading at $20.82 a share.

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