Salesforce Inc (NYSE:CRM, XETRA:FOO) received a reinstated ‘Underperform’ rating and $160 price target from Bank of America, with the firm arguing the software company is facing an “AI-driven structural reset.”
The bank’s price target implies downside from current levels of about $178.
In a note to clients, the bank wrote that Salesforce remains “a deeply entrenched platform,” but warned that artificial intelligence is reshaping the company’s long-term growth outlook and increasing competitive pressures across enterprise software markets.
“We believe the company is transforming from a historically high growth platform to a mature cash generator,” Bank of America analysts wrote. “Therefore, we model structurally lower growth, at approximately 10% annually.”
The firm explained that its cautious stance is driven by three primary concerns tied to AI adoption: “muted net new customer additions, limited upsell potential, and an underwhelming AI monetization pathway.”
Bank of America expects Salesforce revenue growth of 11.1% in fiscal 2027 and 9.6% in fiscal 2028, with operating margins remaining relatively stable at 34% to 35%.
The analysts argued that AI is fundamentally changing how enterprises use customer relationship management software and automation tools. While Salesforce’s Agentforce AI offering is “directionally correct,” the bank said the product currently faces “product challenges and limited impact.”
According to the note, Agentforce contributed less than 2% of revenue in the most recent quarter, while more than 60% of bookings came from existing customer expansions rather than new customer wins.
The analysts also highlighted concerns that AI-driven automation could reduce the need for additional software seats and limit Salesforce’s ability to expand spending within existing customers.
“We therefore view CRM evolving into a saturated mission-critical system of record, rather than a platform capable of incremental growth monetization,” the analysts wrote.
Bank of America also pointed to intensifying competition across the software industry as AI lowers barriers between adjacent markets. The note cited competition from hyperscalers such as Google, as well as rivals including ServiceNow, Shopify, and Adobe.
“While these players often target different subsegments, the net effect is greater overlap, and potential pressure on growth and pricing power,” the analysts wrote.
The bank valued Salesforce shares at nine times estimated calendar 2027 enterprise value to free cash flow, slightly below the broader software peer group, reflecting what it sees as the company’s transition into a more mature platform.