What happens to stocks if AI loses momentum?
Investing.com - Stifel has reduced its price target on salesforce.com (NYSE:CRM) to $325.00 from $375.00 while maintaining a Buy rating, citing multiple compression despite positive long-term outlook. Currently trading at $231.66, the stock has declined over 30% year-to-date, though InvestingPro analysis suggests the stock is undervalued at current levels.
The adjustment follows Stifel’s conversations with four Salesforce partners after the company’s fiscal second quarter results, which revealed consistent to modestly better quarter-over-quarter trends at agencies, driven by minor macro improvements and steady Data Cloud and Agentforce traction. The company maintains impressive gross profit margins of 77.3% and has achieved nearly 8% revenue growth over the last twelve months.
Stifel noted that Salesforce will need to demonstrate improved quarter-over-quarter performance in core business segments and show growth in Data and AI contributions beyond the $1 billion level reported last quarter to drive multiple appreciation amid challenging sentiment in the software sector.
Despite the price target reduction, Stifel remains confident in Salesforce’s long-term positioning and growth opportunities around artificial intelligence technologies.
The firm looks to the upcoming Dreamforce conference as an opportunity for Salesforce management to expand on its vision, provide updates on pricing and packaging changes implemented this year, and offer performance metrics for Agentforce after one year in the market.
In other recent news, Salesforce Inc. and ServiceNow Inc. are in advanced discussions to invest $1.5 billion in Genesys Cloud Services Inc., a provider of AI-powered customer contact center software. This investment would value Genesys at approximately $15 billion. Meanwhile, Salesforce has been the subject of several analyst reports. Citizens analyst Patrick Walravens has reiterated a Market Outperform rating on Salesforce stock with a price target of $430. JMP Securities also maintained its Market Outperform rating and $430 price target on Salesforce after reviewing the company’s merger with Informatica. BMO Capital, however, has lowered its price target on Salesforce to $335 while maintaining an Outperform rating, citing a lack of near-term catalysts. In other developments, JPMorgan released a research note on OpenAI, noting its impressive $10 billion in annual recurring revenue in the first half of 2025. OpenAI is positioned as the third most valuable private company globally, valued at $300 billion.
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