Update shared on04 Sep 2025
Amid concerns about softer near-term demand, subdued enterprise renewals, and limited immediate AI revenue impact—offset by long-term optimism around new product themes and margin expansion—analyst sentiment on Salesforce has turned more cautious, resulting in a consensus price target that remains unchanged at $344.64.
Analyst Commentary
- Analysts are lowering price targets amid softer near-term demand signals, partner feedback indicating underwhelming Q2 activity, and subdued expectations for renewal business, particularly at the enterprise level.
- Cautious sentiment prevails due to concerns about limited near-term catalysts, execution risks surrounding macro and AI-related uncertainties, and a lack of visibility on meaningful Q2 upside or inflections in company results.
- Bullish analysts continue to highlight Salesforce’s investable themes, such as Data Cloud and Agentforce, and point to ongoing margin expansion, but note that AI revenue contributions and momentum require more time to materialize.
- Competitive pressure is increasing in targeted verticals, with Salesforce lagging in major pharma CRM wins compared to Veeva, potentially impacting long-term growth in Life Sciences.
- Salesforce’s recent price increases and evolution of its AI product packaging should offer incremental revenue and support growth in fiscal 2026 and beyond, but are not viewed as near-term catalysts for significant upward revisions.
What's in the News
- Salesforce reduced its customer support staff from 9,000 to around 5,000 in 2025 after deploying AI agents to manage more customer interactions (San Francisco Chronicle).
- The U.S. Navy and Air Force are considering canceling two almost-complete HR software projects, valued at over $800M, to allow Salesforce and Palantir to compete for similar contracts (Reuters).
- Salesforce and ServiceNow are in advanced talks to each invest $750M in AI firm Genesys Cloud Services, potentially valuing Genesys at $15B, with a deal announcement possible soon (Bloomberg).
- BMO Capital lowered its Salesforce price target to $335 from $350 but maintained an Outperform rating, citing positive feedback on Data Cloud and Agentforce but expressing concerns about momentum and the time required for AI initiatives to impact revenue.
- Despite tempered momentum, BMO views Salesforce shares as attractively valued relative to their expected high single-digit growth (BMO Capital).
Valuation Changes
Summary of Valuation Changes for Salesforce
- The Consensus Analyst Price Target remained effectively unchanged, at $344.64.
- The Consensus Revenue Growth forecasts for Salesforce remained effectively unchanged, at 9.6% per annum.
- The Net Profit Margin for Salesforce remained effectively unchanged, at 20.16%.
Disclaimer
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