Bank of America has reopened coverage of Salesforce and assigned an Underperform rating with a $160 price objective, presenting a thesis that the company is undergoing a structural reset prompted by the emergence of artificial intelligence, not merely a temporary slowdown.
BofA frames its concerns around three interrelated structural issues: a constrained ability to win net new customers, weakening upsell trends within the installed base, and an unclear path to sustained monetization for Salesforce's AI initiative, Agentforce.
Analyst Tal Liani characterizes Salesforce as "transforming from a historically high growth platform to a mature cash generator," and incorporates that view into his financial modeling. Liani forecasts revenue growth of roughly 10% per year going forward, a significant deceleration relative to the 18-28% growth rates Salesforce recorded from fiscal 2020 through fiscal 2023.
On the subject of Agentforce, Liani recognizes the impressive headline numbers yet stresses the product's still-limited reach within Salesforce's customer universe. Agentforce is reported to have 23,000 customers and $800 million in annual recurring revenue, growing 169% year-over-year. However, paid Agentforce deals account for only 9-10% of Salesforce's more than 200,000 customers, and over 60% of Agentforce bookings originate from existing customers rather than new logos.
BofA highlights a potential structural tension between automation and Salesforce's traditional seat-based licensing model. As Agentforce automates workflows such as lead qualification and service case resolution, the number of human users requiring Salesforce subscriptions can decline, creating pressure on the seat-based mechanism that historically supported growth.
"We view CRM evolving into a saturated mission-critical system of record, rather than a platform capable of incremental growth monetization," Liani wrote, summarizing the bank's view on how CRM's role may shift as AI functionality becomes embedded.
The analysis also draws attention to intensifying competition from multiple vectors. BofA points to ServiceNow expanding into CRM-adjacent workflows; to Google deploying agent-based orchestration platforms that operate above the application layer; to Adobe competing in marketing; and to Shopify operating in commerce. "While these players often target different subsegments, the net effect is greater overlap, and potential pressure on growth and pricing power," Liani noted.
Despite these headwinds, BofA does not anticipate a wholesale exodus of existing customers. The bank acknowledges Salesforce's deep enterprise entrenchment. Still, Liani warns that entrenched presence does not automatically translate to future incremental growth: "Enterprise entrenchment is not a growth strategy." He further points out that roughly 90% of the Fortune 500 are already Salesforce customers, which constrains the addressable market for new wins.
To derive the $160 price target, BofA applies a valuation multiple of 9 times estimated 2027 free cash flow, a discount to the 10.5 times average multiple observed among software peers, according to the bank's framework.
Key takeaways in this analysis revolve around a shift in the company's growth profile, the limited current penetration of its marquee AI product, and the broadening competitive landscape that reaches into different functional areas of enterprise software. Together, these factors underpin BofA's more cautious stance on Salesforce's near- to medium-term growth and valuation potential.