Salesforce Inc. (NYSE: CRM) has gone from a company that may have lost business as the surge in artificial intelligence was directed toward just a few companies. That was then. Now CEO Marc Benioff is telegraphing after the earnings call that its customers may have an endless AI demand for Salesforce ahead for its Agentforce pipeline with thousands of potential transactions in future quarters.
Salesforce’s AI tools for business just launched on October 24, so the 200 or so orders (like IBM, Accenture, FedEx and others) it secured by the end of the quarter technically mean very little so far. Just don’t tell that to Wall Street — analysts are pushing Salesforce price targets up higher and higher and the AI theme was quite prevalent throughout the price target hike reports.
After an 11% gain to $367.87 on December 4 after earnings, Salesforce shares are up 23% over the last month and they are up 40% YTD. Now Wall Street, which has already been raising expectations, is calling for more Salesforce upside in 2025.
Oggonomics usually comments about how analysts making bold predictions ahead of earnings rather than after earnings. Salesforce actually had around 20 known analyst price target hikes in the 45 days prior to its earnings reports. And the flood of analyst calls with higher targets after the report was massive as well.
ALMOST 20 POSITIVE REPORTS, SO FAR…
Please note that these calls are all summarized targets from the brokerage firm or research outlet named. Oggonomics does not maintain formal in-house price targets and ratings for Salesforce, and any recommendation to buy or sell is from each of the firms by name rather than from Oggonomics. Here are the summaries that have been tracked on the first day after earnings:
- Baird — reiterated Outperform and target raised to $430 from $340
- Barclays — reiterated Overweight and target raised to $425 from $415
- BMO Capital Markets — reiterated Outperform and target raised to $425 from $385
- BofA Securities — reiterated Buy and target raised to $440 from $390
- Canaccord Genuity — reiterated Buy and target raised to $415 from $315
- CFRA — reiterated Strong Buy and target raised to $418 from $380
- Citigroup — reiterated Neutral and target raised to $390 from $368
- DA Davidson — reiterated Neutral and target maintained at $300
- Goldman Sachs — reiterated Buy and target raised to $400 from $360
- Jefferies — reiterated Buy and target raised to $425 from $400
- JMP Securities — target maintained at $450
- JPMorgan — reiterated Overweight and target raised to $380 from $340
- Loop Capital — reiterated Hold but raised target to $360 from $340
- Morgan Stanley — reiterated Overweight and target raised to $405 from $330
- Morningstar — maintained as Hold but target raised to $315 from $290
- Needham — reiterated Buy and target raised to $375 from $345
- Northland Capital Markets — target raised to $440 from $400
- Oppenheimer — target raised to $415 from $385
- RBC Capital Markets — reiterated Outperform and target raised to $420 from $300
- Scotiabank — reiterated Sector Outperform and target raised to $440 from $425
- Stifel — reiterated Buy and target raised to $425 from $390
- Truist Securities — target raised to $400 from $380
After adding these new targets up, many analysts are calling for another gain of nearly 20% over the next year.
MORE ANALYST DETAIL ON GEN/AI OPPORTUNITIES
BofA’s optimism came with the following AI notes:
Q3 results suggest that the company is leading the way in agentic AI cycle with Agentforce. Commentary on pipeline suggests meaningful customer interest in the weeks following October release. Also, this emerging product cycle is not derailing margin expansion… Agentforce was included in 200 deals at the end of the quarter, only one week since generally available, underscoring healthy early interest. Commentary suggests meaningful pipeline builds for Agentforce for both Service and Sales. The release of Agentforce for Sales in 2025 is likely to provide a catalyst for deal closure in the coming quarters. Q4 guidance for cRPO growth of 9% y/y is solidly in line with our estimate. Commentary suggests no contribution for Agentforce is assumed in the guide, suggesting early Agentforce deal closure could provide a source of upside.
Morgan Stanley’s analyst summery also pointed out GenAI strength:
Closing (over) 200 Agentforce with ‘thousands’ more deals in the pipeline likely sustains the excitement around Salesforce’s positioning for this expansive opportunity. With room for upside in both forward revenue and margin expectations, against a reasonable multiple, we remain OW this GenAI winner.
Morningstar’s caution came with the following note based on excessive recent stock gains:
To support shares at these levels, investors must believe Agentforce will drive more top-line acceleration or that margin expansion will come faster and prove greater. Both of these things can happen, but we would prefer to see any evidence of the former before we allow our excitement levels to catch up with the stock. Additionally, shares from much of our software coverage have generally performed well over the last several months despite no real change in fundamentals, so investors must be incorporating a more pro-growth stance, including further rate cuts, from the incoming administration.
