KeyBanc downgraded Salesforce to ‘Sector Weight’ from ‘Overweight’ and removed its price target.
- KeyBanc said it has found little evidence that Agentforce adoption is accelerating.
- Down 39% year to date, CRM is one of the bigger casualties of fears that AI tools will reduce demand for enterprise software.
- Stocktwits sentiment for CRM has dipped even further into bearish territory.
Salesforce, Inc. stock dipped 1.7% on Wednesday and then another 0.5% in the overnight session after an analyst slashed the stock’s rating, citing a weak outlook.
KeyBanc downgraded Salesforce to ‘Sector Weight’ from ‘Overweight’ with no price target and said that its checks and customer conversations have not been strong and neither has the feedback on Agentforce.
One of the company’s main offerings, Agentforce, enables enterprise customers to build and deploy autonomous AI agents to handle tasks such as customer support, sales assistance, workflow automation, and data analysis. The tool drives over $1 billion in sales annually, Salesforce CEO Marc Benioff said in May.
KeyBanc reduced its estimates on Salesforce’s future business after its recent CIO survey, which “delivered another blow,” and said the company stands out for the wrong reasons.
While Salesforce maintains that Agentforce’s Annual Order Value (AOV) is outpacing overall AOV growth, KeyBanc notes that the company’s financial disclosures do not support that.
Salesforce’s Recent Contract Wins, Q1 Results Recap
On Wednesday, Salesforce announced that the U.S. Air Force 441st Vehicle Support Chain Operations Squadron, or VSCOS, had begun using the company’s Missionforce National Security to manage its fleet of over 84,000 vehicles across nearly 389 locations.
In late May, the company reported stronger-than-expected fiscal first-quarter results, driven by robust demand for its AI-powered products, including Agentforce. PepsiCo, Falabella, and Singapore Airlines are some of the publicly disclosed customers of Agentforce.
Salesforce said at the time that it closed 98 deals worth more than $1 million in annual contract value in the first quarter. However, its second-quarter revenue guidance came in slightly below Wall Street expectations, sparking concerns that rapidly advancing AI tools from rivals such as OpenAI and Anthropic continue to pressure demand for enterprise software.
CRM Retail View, Stock Move
On Stocktwits, retail sentiment for CRM dipped to ‘extremely bearish’ as of late Wednesday, from ‘bearish’ the previous day, amid low message volume.
“$CRM Bought $160 August calls last week. Timing worked out. Need to figure out if it’s worth waiting for more profits or wait to sell after the Earnings call. Either way if this goes above $200 I am selling,” a trader wrote.
Although analysts maintain that Salesforce’s business remains healthy and the stock is at an attractive valuation, it remains one of the biggest casualties of the fears of AI-driven demand disruption in the software space.
CRM’s stock is down 39% year-to-date. The company has yet to set a date for its second-quarter results announcement.
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