Key Highlights
- Salesforce (CRM) received downgrades from both Bernstein and KeyBanc to Sector Weight on the same day
- Concerns center around disappointing customer reception and limited traction for Agentforce AI platform
- Shares declined over 4% during premarket hours Thursday, hovering near $159
- CIO survey data reveals growing number of IT leaders planning to reduce Salesforce spending priorities
- KeyBanc’s Jackson Ader warns that enterprise data infrastructure remains insufficiently prepared for AI deployment
Thursday proved to be a challenging session for Salesforce investors. Shares plummeted more than 4% before the opening bell following synchronized rating cuts from Bernstein and KeyBanc Capital Markets, with both investment firms highlighting identical concerns: the Agentforce platform is failing to meet expectations.
Early trading saw CRM hovering around $159, representing a significant retreat from Wednesday’s closing price of $166.58.
Jackson Ader, an analyst at KeyBanc, reduced his rating on CRM from Overweight to Sector Weight, stating he discovered “minimal to no supporting factors, aside from valuation metrics, that would justify maintaining a positive outlook.” This represents a surprisingly frank acknowledgment that bullish arguments have essentially evaporated.
The timing of the downgrade carries particular weight. Salesforce shares have already tumbled 37% year-to-date, leading Ader to concede his call arrives “better late than never.”
The fundamental challenge extends beyond simple valuation metrics — the AI platform itself is problematic. Following attendance at various partner and customer conferences, Ader concluded that enterprise data infrastructure remains insufficiently organized to support meaningful artificial intelligence implementations.
Agentforce, positioned as Salesforce’s premier AI solution, faces pointed scrutiny. Ader characterized the platform as falling short of requirements, noting that implementation partners are only beginning to transition proof-of-concept demonstrations into legitimate sales opportunities.
CIO Research Points to Budget Headwinds
A recent survey of chief information officers conducted by Bernstein reinforced these troubling signals. The research revealed that more IT executives anticipate reducing Salesforce’s priority within their technology budgets over the coming year compared to those planning increased investment. This represents a significant directional indicator that demands attention.
Bernstein specifically highlighted that Salesforce emerged as “a standout for negative reasons” within the survey results — hardly the recognition a company seeks while promoting its AI transformation narrative.
The investment firm also expressed difficulty identifying concrete evidence within financial statements that net-new average order values are expanding at rates exceeding overall AOV growth — a metric that management has emphasized in its communications with investors.
Stock Discount Less Compelling Than Surface Data Suggests
The valuation argument proves more complex upon closer examination. While Salesforce undeniably trades at historically depressed multiples, with its enterprise-value to free-cash-flow ratio sitting approximately 80% below post-2020 highs, this doesn’t necessarily represent the bargain it appears.
Ader challenged the “undervalued stock” thesis, noting that when compared against software industry peers, CRM trades at roughly median levels — and actually commands premium valuations on a growth-adjusted basis. The apparent discount therefore lacks the depth suggested by headline figures.
Bernstein continues to recognize Salesforce as a deeply embedded platform benefiting from strong customer retention. This fundamental assessment remains unchanged. However, expectations regarding any Agentforce-driven growth acceleration have shifted dramatically.
The firm indicated that evidence supporting sustained business acceleration appears “more distant than previously anticipated, assuming it materializes at all.” This marks a considerable departure from Bernstein’s earlier defense of Salesforce against pessimistic “Death of SaaS” predictions.
Ader offered a straightforward assessment: “Achieving meaningful upside requires either larger scale or extended duration of acceleration, and securing that appears increasingly challenging heading into 2026.”
Salesforce declined to provide commentary when contacted by media outlets prior to publication.
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