Needham forecasts renewed growth for Salesforce stock thanks to Agentforce

On Friday, Needham maintained a positive stance on Salesforce.com (NYSE:CRM), reiterating a Buy rating with a price target of $345.00. The firm's confidence in the company has been bolstered by the recent product announcement of Agentforce, which was highlighted during the Dreamforce event earlier this week. According to the firm, this product could be a pivotal development in the application of Generation AI technologies, potentially leading to substantial operational efficiencies.

The analyst from Needham expressed an exceptionally bullish view on Salesforce's near-term sales opportunities, the most optimistic they have been in ten years. This sentiment follows in-person attendance at Dreamforce and meetings with Salesforce management. The analyst noted that conversations within the CRM ecosystem revealed a strong interest in Agentforce, suggesting that it could significantly re-accelerate subscription revenue growth.

The demand for Agentforce is believed to be strong enough to potentially push subscription revenue growth back to the 10% level. Additionally, the analyst anticipates that the success of Agentforce might lead to increased usage of Salesforce's other offerings, such as Data Cloud and Mulesoft, which are necessary for the effective use of Agentforce by agents.

The pricing model for Agentforce, set at $2 per conversation, is expected to encourage trials and rapid adoption among users. The analyst's commentary indicates a clear expectation that Agentforce will be a major driver of growth for Salesforce, as it appears to align well with emerging AI technologies and market demands.

In other recent news, Salesforce reported strong second-quarter earnings, with earnings per share reaching $2.56, exceeding the consensus estimate of $2.36 and the previous year's figure of $2.12. The company also noted an 8% increase in sales, largely driven by a 9% rise in subscription and support revenues. Salesforce has also entered into a definitive agreement to acquire Own Company, a data protection and management solutions provider, for $1.9 billion in cash.

In terms of analyst updates, Baird, Truist Securities, Mizuho Securities, and Evercore ISI have maintained their positive outlooks on Salesforce, while Erste Group downgraded the stock from Buy to Hold due to projected slower growth. The analysts highlighted Salesforce's potential for continued growth, driven by various strategic moves and product innovations.

Among other recent developments, Salesforce launched Agentforce, an AI-driven suite of autonomous bots, and reported a significant increase in the adoption of its Data Cloud platform, with a 130% year-over-year growth in its paid customer base. The company also announced a partnership with IBM (NYSE:IBM) to integrate advanced AI capabilities into its platform.

InvestingPro Insights

Supporting Needham's bullish stance on Salesforce.com (NYSE:CRM), recent InvestingPro data and tips underscore the company's strong financial health and growth potential. Salesforce boasts an impressive gross profit margin of 76.35% over the last twelve months as of Q2 2025, highlighting the company's ability to maintain profitability in its operations. With a revenue growth of 10.26% during the same period, Salesforce is showing a steady increase in its financial performance, aligning with the analyst's optimistic view on the company's sales opportunities.

Furthermore, InvestingPro Tips suggest that Salesforce's management is confident in the company's trajectory, as evidenced by aggressive share buybacks. This, along with the fact that 23 analysts have revised their earnings upwards for the upcoming period, indicates strong confidence in Salesforce's future growth, particularly with new products like Agentforce poised to drive revenue.

For those looking for more insight, InvestingPro offers additional tips on Salesforce, providing a comprehensive analysis of the company's financials and market position. As of now, there are 13 more InvestingPro Tips available, which can be explored for a deeper understanding of Salesforce's investment potential.

With a market capitalization of $254.29 billion and a forward-looking P/E ratio of 42.2, Salesforce is trading at a valuation that reflects its anticipated earnings growth. These data points, coupled with the product innovations such as Agentforce, suggest that Salesforce is well-positioned to capitalize on the next wave of AI technology in the CRM industry.

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