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BofA just turned the volume down
Salesforce is still the giant in the room, but BofA Securities thinks the music has changed. Analyst Tal Liani reinstated coverage on the stock with an Underperform rating and a $160 price target, arguing that AI is forcing a long-term reset in how investors should think about growth.
That’s a pretty stark vibe shift for a company that used to live in the “cloud software keeps eating the world” bucket.
The AI problem: useful, but not magical
Liani’s basic argument is that Salesforce’s AI push — especially Agentforce — looks directionally right, but not like a near-term rocket booster.
A few of the red flags he pointed to:
- Agentforce contributed less than 2% of total revenue in the latest quarter
- More than 60% of bookings are coming from expansions, not fresh customers
- AI automation could crimp upsell opportunities by shrinking seat counts and front-office workloads
In other words, the old playbook of land-and-expand may not be as juicy if AI starts doing some of the “expand” part for you.
Competition is getting weirdly crowded
The analyst also flagged a growing mess of competitors taking bites out of Salesforce’s turf. Think Google in workflow automation, ServiceNow creeping into CRM, Shopify in commerce, and Adobe in marketing.
None of those companies are becoming Salesforce overnight. But if AI keeps blurring the lines between products, your pricing power can get a little wobbly. And once software customers start asking, “Do we really need all these seats?” the spreadsheet gets less cheerful fast.
Why investors should care
Salesforce shares were up 2.41% to $177.70 when the note landed, so the market was not exactly in panic mode. But the bigger issue is philosophical: is Salesforce still a high-growth platform, or is it maturing into a steady-ish software utility with roughly 10% growth?
That’s the kind of re-rating question that can matter a lot more than one day’s price move.
Big picture: Salesforce isn’t broken, but BofA is basically saying the AI era may turn yesterday’s growth darling into a slower, messier, more crowded business.