Salesforce Underperform Rating and $160 Target Signal AI Growth Risks
Bank of America assigned Salesforce an Underperform rating with a $160 price target, implying about 10% downside from recent $178 levels. It models structurally lower revenue growth of around 10% annually, citing underwhelming Agentforce AI monetization (under 2% revenue) and muted new customer additions.
1. Rating and Price Target
Bank of America assigned an Underperform rating to Salesforce and set a $160 price target, implying roughly 10% downside from recent $178 stock levels. This stance reflects a view that AI-driven shifts are prompting a structural reset in the company’s growth trajectory.
2. Growth Forecast and AI Concerns
The analysis models approximately 11.1% revenue growth in fiscal 2027 and 9.6% in fiscal 2028, translating to around 10% annual growth. It highlights concerns that artificial intelligence will mute net new customer additions and limit upsell potential within the CRM platform.
3. Agentforce AI Performance
Salesforce’s Agentforce AI contributed less than 2% of revenue in the most recent quarter and is facing product challenges that have constrained its impact. More than 60% of current bookings stemmed from existing customer expansions, underscoring limited net-new traction.
4. Competitive Pressures and Valuation
Intensifying competition from hyperscalers such as Google and software peers including ServiceNow, Shopify and Adobe may pressure growth rates and pricing power. The company is valued at 9 times estimated 2027 EV/FCF, below the broader software peer average, reflecting a transition to a more mature cash generator.