Morgan Stanley Slashes Salesforce Price Target by 35% on Timing Concerns
Morgan Stanley analyst Adam Wood downgraded Salesforce from Overweight to Equal Weight and slashed the price target from $287 to $185, a 35% reduction. The downgrade is driven by timing concerns rather than skepticism about Salesforce's AI strategy. While Agentforce, Salesforce's agentic AI platform, has reached a $3.4 billion annualized run rate, it represents only 7% of Salesforce's $46 billion revenue base and is not yet large enough to offset weakness in legacy segments like Commerce and Tableau. CRM stock fell 2.2% on the day of the downgrade and is down 35% year-to-date. The stock trades at roughly 12 times earnings, with buybacks providing a floor. Wood believes the AI inflection will take longer than expected, and the lower target reflects compressed software sector valuations.
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