Home / Business and Economy / BofA Downgrades Salesforce, Citing AI Transition Risks
BofA Downgrades Salesforce, Citing AI Transition Risks
18 May
Summary
- Bank of America downgraded Salesforce to 'underperform' rating.
- Concerns focus on AI transition impacting growth and upsell.
- Salesforce stock has declined 35% year-to-date.
Bank of America has initiated coverage of Salesforce with an "underperform" rating and a $160 price target, signaling a potential 8% downside. The analyst team expressed concerns that Salesforce's ongoing AI transition, despite efforts to modernize, could lead to structurally lower growth.
Key concerns include muted net new customer additions, limited upsell opportunities, and an underwhelming pathway for monetizing AI technologies. Bank of America forecasts approximately 10% annual growth for the company moving forward.
These concerns emerge as Salesforce stock has seen a significant 35% decline year-to-date, influenced by broader market fears about AI disrupting traditional software businesses. While Salesforce has integrated AI into its offerings and cited it for layoffs, Bank of America remains cautious about its long-term impact.
