Wall Street still thinks Microsoft could buy $50 billion Salesforce

It's been nearly 6 months since talks of Microsoft acquiring Salesforce fizzled out, but some Wall Street analysts still believe the deal could go through sometime soon.

The investment bank Stifel wrote in a recent note that it maintains a "buy rating" for Salesforce because the company's heading into its seasonally strongest quarter, but also because of a potential deal with a big tech company.

"A level of optionality still exists to the upside as industry contacts refuse to dismiss the notion of CRM joining forces with another tech behemoth like Microsoft or Oracle," it wrote.

This comes just a few days after Credit Suisse conveyed a similar notion in its note for Salesforce. "We believe that the potential for an acquisition still provides further optionality for the stock and, at the very least, a 'higher floor' for the stock - resulting in a continued favorable risk/reward," it wrote.

Salesforce would certainly make for an attractive acquisition target for Microsoft. Its cloud CRM software, used by sales and marketing reps, is the de facto market leader with a nearly 20% share, while Microsoft is considered 4th in the space with just about 6% market share. Salesforce has been consistently beating earnings in recent quarters, and its shares have been trading at record-high levels too, giving a market cap of roughly $50 billion.

It was reported in May that Microsoft had approached Salesforce with a $50 billion offer, which was turned down by Salesforce CEO Marc Benioff, who countered with a $70 million deal. The two companies have historically been rivals, but they have been working much more closely lately, after Microsoft hired Satya Nadella as its new CEO last year.

Stifel's managing director Tom Roderick told us the rumored deal is still something investors are keeping an eye on, although it's considered "dormant" at this point. But there's always a chance of the talks resurfacing, especially because there hasn't been any big merger deals in the software space lately.

"It's been too quite for too long for strategic M&A," Roderick said. "The discussion is dormant until proven otherwise, but I think for the next 6 months, you're going to see some activity in M&A that adjust the way people think about it."

Although unlikely to be discussed at all, investors will tune into Salesforce's earnings Wednesday to see if any of this gets addressed. Salesforce is forecasting revenue in the range of $1.69 billion to $1.70 billion and adjusted earnings per share between $0.18 and $0.19. Analysts estimates are revenue of $1.69 billion and earnings of $0.19 per share.