Salesforce has been under pressure of late, and that decline is due to deepen despite the cloud-based software firm’s efforts to modernize its business with artificial intelligence, according to Bank of America. The bank reinstated coverage of the software name with an underperform rating. It previously rated Salesforce as buy. BofA also put a $160 price target on shares, suggesting roughly 8% downside from Friday’s close. “Salesforce remains a deeply entrenched platform, yet we expect a structural reset driven by AI transition that raises three core concerns: muted net new customer additions, limited upsell potential, and an underwhelming AI monetization pathway,” analyst Tal Liani said Monday in a note to clients. “Therefore, we model structurally lower growth, at ~10% annually.” Salesforce stock has slumped 35% in the year to date as fears that AI can disrupt traditional software businesses have weighed heavily on shares. CRM YTD mountain Salesforce stock is down roughly 35% in the year to date. To counter those concerns, Salesforce has integrated AI into its offerings, even using the technology to power an army of customer service bots called “Agentforce.” CEO Marc Benioff also cited AI as a driver of Salesforce’s sweeping layoffs last year, arguing that executives “need less heads” due to adoption of the technology. However, Bank of America has a much more cautious outlook on the company’s AI push. “We believe AI fundamentally alters the Company’s [long-term] growth trajectory and view the company’s Agentforce as directionally correct but having product challenges and limited impact,” Liani wrote. The analyst noted that Salesforce’s AI initiatives added less than 2% to its top line in the most recent quarter. Bank of America’s call goes against consensus on the Street. Of the 52 analysts covering Salesforce, 39 have a buy or strong buy on the stock, LSEG data shows.
