Salesforce stock maintains Buy rating as Needham notes AI investments

Investing.com - Needham maintained its Buy rating and $400.00 price target on salesforce.com (NYSE:CRM), representing a potential 69% upside from the current price of $236.58, following the company’s Dreamforce conference and Analyst Day this week. The company, currently valued at $225 billion, shows strong fundamentals with a perfect Piotroski Score of 9 according to InvestingPro analysis.

The firm highlighted that major large language model (LLM) vendors have tripled their investment in Salesforce applications over the past 12 months, according to comments from Salesforce CRO Miguel Milano.

Needham indicated this development contradicts market sentiment that generative AI might negatively impact enterprise software, noting that if LLM vendors themselves are increasing their Salesforce investments, it demonstrates the continued relevance of specialized enterprise applications.

The firm also observed that Salesforce’s newly announced Agentforce products were "more interesting than expected," though ecosystem conversations suggest poor customer data management is currently slowing deployments.

During the conference, Salesforce outlined ambitious targets of $60 billion in revenue and 40% non-GAAP operating margins by fiscal year 2030, which Needham believes "easily beat Street expectations."

In other recent news, Salesforce has made several significant announcements following its annual Dreamforce conference. The company introduced Agentforce 360, enhancing its platform with new agent-building capabilities, voice features, and improved workflows. Salesforce also announced a collaboration with Stripe and OpenAI to develop an Instant Checkout integration using the Agentic Commerce Protocol, aimed at streamlining AI-powered shopping experiences. Additionally, Salesforce and OpenAI have expanded their partnership to integrate Salesforce’s Agentforce 360 platform into ChatGPT, allowing users to access CRM data and build AI agents with OpenAI’s models.

On the financial side, Salesforce’s stock ratings have been reaffirmed by multiple analyst firms. Stifel maintained its Buy rating with a $300 price target, citing the advancements presented at Dreamforce. Raymond James reiterated its Strong Buy rating with a $375 price target, highlighting Salesforce’s new long-term growth targets. Meanwhile, RBC Capital kept its Sector Perform rating with a $250 price target, acknowledging the company’s platform evolution. These developments reflect Salesforce’s strategic focus on AI and agentic capabilities, as emphasized during the conference.

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