Stifel analyst J. Parker Lane lowered his price target on Salesforce (CRM) stock to $325 from $375 but kept a Buy rating. His revised outlook reflects concerns over near-term performance, even though he remains optimistic about Salesforce’s future in AI. CRM stock was up about 2% on Wednesday.
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Key Reasons Behind Price Cut
Lane spoke with several Salesforce partners after the company’s fiscal Q2 (ended July 31) earnings. He found that business trends were steady to slightly better, with support from modest macro improvements and growing use of Agentforce, Salesforce’s AI platform.
However, he noted that the software sector is under pressure, and Salesforce needs to show stronger sequential growth and better results from its Data + AI segment (which hit $1 billion last quarter) to justify a higher valuation.
Looking ahead, Lane eyes Dreamforce 2025, Salesforce’s flagship conference in October, for updates on the company’s AI strategy, pricing and packaging changes, and performance metrics of Agentforce after one year in market.
While Lane remains confident in Salesforce’s long-term growth, he trimmed his price target due to valuation pressures and the need for clearer near-term execution.
Salesforce’s Moves to Bolster AI
Salesforce has been expanding its AI capabilities through a mix of strategic partnerships and acquisitions, aiming to make its platform more accessible.
It recently deepened ties with Nice (NICE), adding the latter’s AI tools to Service Cloud. This helps customer service teams use AI to automate tasks and respond faster, with full context from past customer interactions.
Salesforce also teamed up with Nvidia (NVDA) to build smarter AI agents and avatars through its Agentforce platform. By combining Salesforce’s CRM know-how with Nvidia’s powerful computing, the two aim to deliver more predictive and personalized AI experiences across sales, service, and marketing.
On the acquisition front, Salesforce has acquired Convergence.ai, which specializes in adaptive AI agents that can navigate complex digital workflows, and Waii, a natural language-to-SQL startup. Also, Salesforce is pursuing an $8 billion acquisition of Informatica (INFA), a leader in data integration and governance. These moves are likely to strengthen its AI infrastructure.
Is CRM a Buy, Sell, or Hold?
Turning to Wall Street, CRM stock has a Moderate Buy consensus rating based on 33 Buys, nine Holds, and two Sells assigned in the last three months. At $350.24, the average Salesforce stock price target implies a 48.46% upside potential.
