Key Takeaways
- Bernstein and KeyBanc simultaneously downgraded Salesforce (CRM) to Sector Weight on Thursday morning
- Both firms expressed skepticism about customer adoption and traction for Agentforce, the company’s AI platform
- Salesforce shares tumbled over 4% during premarket hours on Thursday, hovering near $159
- Recent CIO survey data reveals more executives intend to reduce Salesforce spending in their IT budgets
- KeyBanc’s Jackson Ader noted enterprise data infrastructure remains inadequate for effective AI deployment
Thursday proved challenging for Salesforce as shares plunged over 4% in premarket activity following simultaneous rating cuts from two prominent firms. Both Bernstein and KeyBanc Capital Markets lowered their outlook on the cloud software giant, pointing to a common culprit: underwhelming performance from Agentforce.
Shares traded near $159 during early morning hours, marking a decline from Wednesday’s closing price of $166.58.
Jackson Ader of KeyBanc cut his rating on CRM from Overweight to Sector Weight, stating he discovered “little to no evidence, other than the valuation multiple, that the stock lends itself to a bullish recommendation.” The statement represents a frank acknowledgment that optimistic scenarios have lost credibility.
Ader conceded the timing could have been better. Salesforce shares have already tumbled 37% year-to-date, and he characterized the downgrade as “better late than never.”
The fundamental concern extends beyond pricing metrics — it centers on the artificial intelligence product itself. Following attendance at various partner and customer gatherings, Ader concluded that enterprise data remains insufficiently organized to support meaningful AI applications.
Agentforce, which Bernstein positioned as its premier AI solution, faces pointed criticism. Ader characterized the platform as falling short of expectations, noting that partners are only beginning to transition proof-of-concept initiatives into genuine sales opportunities.
CIO Spending Survey Reveals Troubling Trends
Research from Bernstein’s CIO survey reinforced these apprehensions. The data showed more chief information officers planning to reduce Salesforce allocations in their technology budgets over the coming year compared to those anticipating increased investment. This directional indicator carries significant weight.
Bernstein observed that Salesforce emerged as “a standout for the wrong reasons” within the survey results — hardly the recognition a company seeks while promoting an AI-driven transformation narrative.
The research firm also highlighted difficulties identifying evidence in financial statements supporting management’s claims that net-new average order values are expanding faster than overall AOV growth — a metric leadership has emphasized in public communications.
Valuation Metrics Present Complex Picture
The valuation narrative proves more complicated than surface-level analysis suggests. While Salesforce does trade at historically compressed multiples, with its enterprise-value to free-cash-flow ratio sitting roughly 80% below post-2020 peaks, context matters.
Ader challenged the “undervalued stock” thesis. Compared against software sector counterparts, CRM trades at or near median levels — and actually above peer averages when adjusted for growth rates. The perceived discount diminishes under closer examination.
Bernstein continues viewing Salesforce as a deeply embedded platform with resilient customer retention. That fundamental assessment remains unchanged. The shift involves expectations around timing for any Agentforce-powered growth acceleration.
Bernstein indicated that indications of sustainable acceleration appear “further out than we’d expected, if it plays out at all.” This represents a meaningful tonal shift from a firm that previously defended Salesforce against broader “Death of SaaS” critiques.
Ader offered a straightforward summary: “Larger or longer acceleration is needed to deliver upside, and that, it seems, will be hard to come by in 2026.”
Salesforce had not provided comment to media inquiries by publication time.
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