Bank of America Upgrades Salesforce to Buy From Underperform, Lifts Price Target to $285 From $160

Bank of America told investors in May to stay away from Salesforce. Today, Oct. 12, it told them to buy.

Analyst Tal Liani moved Salesforce (NYSE: CRM) from Underperform straight to Buy and raised his price target to $285 from $160. CNBC, citing the prior close, put the new target about 24% above where the stock last finished.

Shares climbed between roughly 3% and 4.6% in morning trading, hitting a range of about $237 to $239. The stock is still down about 13% to 14% on the year.

What changed since May

On May 18, BofA downgraded Salesforce to Underperform. The bank warned then that revenue growth could slow to about 10% a year, pointing to limited new-customer wins and weak early returns on Agentforce, the company's AI agent platform. Agentforce made up less than 2% of Salesforce revenue at the time.

Liani's new argument runs the other way. "Large enterprises (more than SMBs) are unlikely to replace platforms that house their business logic, data, workflows and compliance frameworks," he said Monday. "If anything, AI should deepen dependence on these platforms."

He cited "strong free cash flow generation and expected growth reacceleration" as drivers of the upgrade, and said they support "a modest valuation premium." He also pointed to strong net new annual order value growth and accelerating performance at Slack.

The numbers behind the call

Salesforce's own results give the bulls something to work with. In its second quarter of fiscal 2027, reported Aug. 26, Agentforce annual recurring revenue topped $1.5 billion, up from $1.2 billion in the April quarter and more than 240% higher than a year earlier. Current remaining performance obligations reached $33.5 billion.

Revenue for the quarter was $11.35 billion, up 10.8% from a year earlier, against analyst expectations of $11.33 billion.

Salesforce also says early deployments of its new commerce-focused AI features produced a 13% increase in conversion rates and a 17% rise in cart additions. Those are company-reported figures from initial rollouts, not independent measurements.

Liani named the Winter 27 release as a catalyst. It widens Agentforce availability and builds it deeper into the workflows customers already run on Salesforce.

Salesforce also announced an agreement to acquire Loops, an AI analytics startup, which it plans to fold into Tableau. The company has not disclosed financial terms in the material reviewed for this story.

Valuation and the Street

At about 14 times forward earnings, Salesforce trades well below ServiceNow at 28 times and Palantir at 85 times, according to 24/7 Wall St. ServiceNow was up about 3% in morning trading. Palantir was down 0.2%.

The software sector ETF IGV was up 0.6% while the Invesco QQQ Trust was down 0.2%.

BofA is joining a crowd. Of the 51 analysts covering Salesforce, 36 already rated it Buy or Strong Buy, according to LSEG data cited by CNBC. MarketBeat's tally puts the consensus price target at $278.12. Mizuho lifted its target to $280 in September, and Citizens JMP sits at $315.

The stock opened Monday at $228.95, per MarketBeat, with a market cap of about $188 billion. Its 52-week range is $146.32 to $269.11.

The risk Liani names himself

The worry that dragged the stock down this year was that wider AI adoption could cut demand for traditional software tools. Liani's upgrade argues that fear is overblown. He does not claim it is gone.

He acknowledged that Salesforce's AI revenue is still small and that slower-than-expected adoption is "the greatest near-term risk for the stock." He wrote that he sees "encouraging signs of improving momentum" that support a return to faster growth.

The May downgrade rested on a specific claim: that growth was heading toward 10% and Agentforce was too small to change that. Salesforce's reported revenue growth of 10.8% in the latest quarter is close to that figure. What has moved is the Agentforce trajectory, which is now measured in billions of dollars of annual recurring revenue.

Salesforce is also shifting AI agents toward consumption-based pricing, where customers pay for usage rather than a flat subscription. It has expanded its partnership with Anthropic, announced as Claudeforce in August, and showed off a new interface called AIforce at Dreamforce in September.

What to watch

BofA's own May figure is the benchmark. Agentforce was under 2% of Salesforce revenue then. Whether that share grows meaningfully, and whether the commerce results hold up beyond early deployments, will show up in the company's next quarterly report.

Salesforce has guided to third-quarter fiscal 2027 earnings of $3.42 to $3.44 per share.