Bank of America Securities has reversed its bearish stance on Salesforce (NYSE: CRM), upgrading the stock two notches from Underperform to Buy and raising its price target to $285 from $160 after concluding that artificial intelligence is more likely to strengthen the company’s enterprise software business than replace it.The October 12 upgrade marks a sharp turnaround from the bank’s May assessment, when it warned that AI could fundamentally disrupt Salesforce’s business model. The $125 target increase represents a 78.1% upward revision, driven by a reassessment of the company’s competitive position and growth prospects.CRM stock initially rallied as much as 5.1% during Monday’s session, touching $240.90, before trimming its gains. Shares traded at $232.52, up 1.48% from Friday’s $229.13 close, as of 1:36 p.m. Eastern time.
Bank of America Reverses Its May Bearish Call on Salesforce
BofA analyst Tal Liani reinstated coverage of Salesforce on May 18, 2026, with an Underperform rating and a $160 price target, arguing that enterprise software faced a structural reset driven by artificial intelligence.At the time, the bank identified three main challenges: limited additions of new customers, weakening opportunities to increase spending among existing customers, and an uncertain monetization path for Salesforce’s Agentforce AI platform.The underlying concern was that AI assistants and autonomous agents could reduce the importance of traditional software interfaces, allowing enterprises to bypass applications that historically generated recurring subscription revenue.Five months later, Liani has changed his assessment following discussions with chief information officers and other enterprise technology market participants.According to BofA Securities, large organizations are highly unlikely to replace established platforms containing their business logic, customer data, workflows and compliance frameworks.The bank now argues that AI adoption could increase dependence on these systems because autonomous agents still require reliable corporate data, permissions and processes to execute tasks.”If anything, AI should deepen dependence on these platforms,” Liani wrote in his October 12 research note.The reversal goes beyond a more optimistic earnings forecast. BofA has changed its assessment of whether AI represents a structural threat to Salesforce or an opportunity to strengthen its position within large enterprises.
Why BofA Now Sees Salesforce as an Enterprise AI Beneficiary
Liani highlighted Salesforce’s integrated approach to enterprise AI, comprising governed data, applications, AI agents and conversational interfaces.Its established Sales Cloud and Service Cloud applications provide the business processes, while Agentforce supports automated reasoning and task execution. Slack and the company’s Anthropic-powered Claudeforce offering provide additional ways for employees to interact with those systems.The distinction matters because building an individual AI application is considerably different from replacing a platform that manages sensitive customer information, corporate approvals and interconnected workflows across thousands of employees.BofA believes internally developed AI tools may handle isolated tasks but are less likely to displace established enterprise software infrastructure at scale.The bank also pointed to signs of improving commercial momentum, including larger new deals and stronger performance at Slack.Salesforce’s Claudeforce partnership with Anthropic provides another element of that strategy, extending AI-powered workflows across its existing enterprise applications.
Agentforce Revenue Growth Supports the New Bullish Thesis
Salesforce’s latest quarterly results offer measurable evidence of growing AI adoption.For its fiscal second quarter ended July 31, 2026, the company reported Agentforce annual recurring revenue exceeding $1.5 billion, an increase of more than 240% year over year.Combined annual recurring revenue from Agentforce and Data 360 approached $3.9 billion, up more than 210%. Salesforce also reported $11.3 billion in quarterly revenue, representing 11% annual growth, including contributions from its Informatica acquisition.The Agentforce ARR definition was expanded during the quarter to include offerings such as Slackbot and Headless 360, an important consideration when comparing growth across reporting periods.As FinanceFeeds reported following Salesforce’s second-quarter earnings, the rapid expansion of AI-related revenue provided evidence that Agentforce was becoming a meaningful commercial product rather than merely a prospective growth opportunity.However, AI-related revenue remains a relatively small portion of Salesforce’s overall business. Strong percentage growth from a smaller base does not yet establish that AI can accelerate company-wide organic revenue growth.
What the New $285 CRM Stock Target Means
BofA’s revised $285 price target implies approximately 24.4% upside from Salesforce’s Friday closing price and roughly 22.6% from the $232.52 intraday quotation.According to published summaries of Liani’s research, the new valuation applies approximately 16 times projected 2027 free cash flow, compared with nine times under the previous approach.That change is significant because the higher target reflects not only improved growth expectations but also a higher valuation multiple assigned to the company’s future cash generation.BofA increased its subscription and support revenue growth estimates to 10.4% for fiscal 2028 and 10.5% for fiscal 2029, compared with earlier forecasts of 9.9% and 10.2%, respectively.The principal remaining risk is slower-than-expected AI adoption. If enterprises continue experimenting with agents without committing substantial additional spending, Salesforce could struggle to justify the higher expectations embedded in its upgraded valuation.The uncertainty also explains the wide range of possible outcomes explored in FinanceFeeds’ Salesforce stock valuation analysis.
Salesforce Also Announces Loops Acquisition
Separately on October 12, Salesforce announced a definitive agreement to acquire Loops, an AI-powered analytics company whose technology monitors business performance, identifies changes in key metrics and recommends actions.Salesforce plans to incorporate the technology into Tableau, allowing businesses to use automated analysis within existing workflows. The transaction is expected to close in early November, subject to customary conditions. Financial terms were not disclosed.The announcement provides additional evidence of Salesforce’s investment in AI-driven enterprise software, although the relative contribution of the acquisition and BofA’s upgrade to Monday’s share-price movement cannot be independently established.
What CRM Investors Should Watch Next
Salesforce’s next quarterly results will provide an important test of BofA’s revised outlook.The company previously guided fiscal third-quarter revenue to between $11.42 billion and $11.5 billion, with current remaining performance obligations expected to grow approximately 14% year over year.Investors will be watching whether Agentforce adoption continues expanding, whether customers are increasing their overall spending, and whether AI products can improve organic subscription growth rather than simply replace existing software revenue.For CRM stock, the central question has shifted. BofA no longer views AI primarily as a mechanism that could undermine Salesforce’s established software business. Its new Buy rating assumes that the same enterprise infrastructure will become more valuable as AI agents take on a larger share of corporate work.The next earnings report will help determine whether that reversal is supported by sustained commercial growth.
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