Bank of America Securities has reinstated coverage of Salesforce (CRM) with an Underperform rating and a $160 price target, warning that the rapid adoption of artificial intelligence could fundamentally reshape the company's traditional growth engine. The cautious call arrives just ahead of Salesforce's fiscal first-quarter earnings report, scheduled for release on May 27 after the market close.
Despite the bearish outlook, Salesforce shares edged higher in early Monday trading, gaining $3.36 to reach $176.87. The stock had already climbed 3.54% on Friday to close at $173.51, outperforming the broader market as the S&P 500 fell 1.24% and the Dow Jones Industrial Average declined 1.07% that day.
BofA analyst Tal Liani highlighted what he described as a potential “structural reset” for the enterprise software giant, driven by AI’s ability to automate tasks traditionally performed by human users. Liani cautioned that AI could reduce demand for Salesforce’s seat-based subscriptions, a core pillar of its revenue model. “Enterprise entrenchment is not a growth strategy,” Liani wrote, noting that approximately 90% of Fortune 500 companies are already Salesforce customers. He characterized Salesforce as a “saturated mission-critical system of record,” with limited incremental growth left to monetize.
Liani projects that Salesforce's revenue growth will settle at roughly 10% annually, a sharp deceleration from the 18% to 28% growth rates the company posted between fiscal 2020 and fiscal 2023. This shift, he argues, positions Salesforce more as a cash-generating mature business than a high-growth technology leader.
Salesforce has pushed back against such concerns, pointing to the early success of its AI agent product, Agentforce. In February, the company reported that Agentforce had generated $800 million in annual recurring revenue, a 169% increase year-over-year. For fiscal 2026, Salesforce posted total revenue of $41.5 billion, up 10%, and raised its fiscal 2030 revenue target to $63 billion, incorporating the impact of its recent acquisition of Informatica.
Chairman and CEO Marc Benioff has been bullish on AI’s potential, stating that “Agentic AI is a tailwind” for the business. President and CFO Robin Washington echoed that sentiment, saying the company sees a stronger outlook to reaccelerate organic revenue growth in the second half of fiscal 2027.
The competitive landscape is also intensifying. Liani pointed to ServiceNow expanding into overlapping workflows, Google pushing deeper into AI orchestration, and Adobe strengthening its marketing capabilities—all moves that could pressure Salesforce’s growth and pricing power.
Investors will get a clearer picture when Salesforce reports its fiscal Q1 2027 results on May 27. The company recently announced a change in revenue reporting for fiscal 2027, splitting results into two categories: Agentforce Apps and Data 360, Platform & Other. This restructuring is designed to highlight how AI and data capabilities now permeate the entire product lineup.
BofA’s bearish stance could be tested if Salesforce’s AI products achieve stronger paid adoption sooner than anticipated. For now, the market appears to be weighing Salesforce’s optimistic AI narrative against the bank’s warning that AI could complicate—rather than accelerate—its long-standing growth story.
