Two 59%+ winners, four above 25% in Aug – How this AI model keeps picking winners
On Thursday, Wells Fargo (NYSE:WFC) analyst Michael Turrin increased the price target for Salesforce stock (NYSE:CRM) to $275 from the previous $255, while maintaining an Equal Weight rating on the shares. According to InvestingPro data, Salesforce, with its impressive $264.8 billion market cap and robust gross profit margins of 77.2%, is currently trading near its Fair Value, suggesting balanced market positioning. Turrin noted that Salesforce’s first-quarter results were satisfactory, particularly in light of the mixed outcomes seen across the enterprise and the timing of Informatica (INFA) deals. He emphasized that the unchanged guidance for fiscal year 2026 was a positive sign, despite expectations that the stock will likely move sideways due to the uncertain economic environment and pending developments until fiscal year 2027.
Salesforce’s Data Cloud and Agentforce showed mixed momentum. The Data Cloud and AI’s annual recurring revenue (ARR) has exceeded $1 billion, continuing to grow at a rate of over 120% year-over-year. This growth aligns with the company’s overall revenue expansion of 8.7% in the last twelve months, supported by strong fundamentals and a healthy P/E ratio of 42.7x earnings. However, this growth rate implies that net new ARR is approximately $100 million. Agentforce’s ARR was quantified at around $100 million, with a total of 8,000 cumulative deals, of which 4,000 are paid and 800 are live. This indicates an average deal value of $25,000 and a decrease in the paid-to-free ratio, as well as a drop in net new paid deals, down to around 1,000 from roughly 3,000 in the fourth quarter.
Turrin expressed continued skepticism regarding the rationale behind Salesforce’s investment in Informatica, considering more modern alternatives available in the market. He anticipates that the narrative around Salesforce’s AI capabilities will remain unchanged until the Informatica deal is finalized in February. Despite these concerns, Wells Fargo’s updated price target suggests a moderate level of confidence in Salesforce’s market positioning and future performance. InvestingPro analysis reveals a "GOOD" overall financial health score, with 8+ additional ProTips and a comprehensive Pro Research Report available for deeper insights into Salesforce’s investment potential.
In other recent news, Salesforce has reported robust financial performance, with several analysts providing updates on their outlook for the company. Wolfe Research maintained an Outperform rating, highlighting Salesforce’s impressive 11% growth in constant currency remaining performance obligations and a significant 120% year-over-year growth in its Agentforce and Data Cloud services, reaching $1 billion in annual recurring revenue. KeyBanc Capital Markets reaffirmed its Overweight rating, noting Salesforce’s disciplined approach to mergers and acquisitions and a substantial 16.3% increase in current bookings. Truist Securities reiterated a Buy rating, emphasizing Salesforce’s performance in subscription and support revenue and the doubling of annual recurring revenue in the Data Cloud and AI segment.
Baird analysts adjusted their price target for Salesforce to $365, maintaining an Outperform rating, while noting the company’s revised upward revenue forecast for fiscal year 2026. They also highlighted the potential of Salesforce’s newer ventures, such as Data Cloud and Agentforce, as significant growth drivers in the future. Stifel analysts echoed a positive sentiment with a Buy rating, focusing on Salesforce’s strong positioning in agentic artificial intelligence and the company’s strategy to expand its go-to-market capacity. Overall, these recent developments underscore Salesforce’s strategic adjustments and growth potential in both its core and emerging business segments.
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