Salesforce gains momentum as AI strategy resonates with clients: Wedbush

Salesforce (NYSE:CRM) recently unveiled Agentforce, which allows clients to build and deploy autonomous artificial intelligence agents capable of handling various tasks, and the new offering is resonating with customers, according to Wedbush.

Agentforce will be generally available on October 25.

“Based on recent checks and after a plethora of conversations with customers at Dreamforce, the company’s AI strategy is now resonating well among its core customer base by providing an agent-first ecosystem that interacts with customers and employees across applications for a wide array of use cases while providing an extended omni-supervisor to track what agents do with humans,” said Wedbush analysts, led by Daniel Ives, in an investor note.

Wedbush reiterated its Outperform rating on the stock and increased the price target to $325 from $315.

“One of the biggest initiatives in the field is around monetizing the AI theme within the CRM massive installed base as we believe this is a major land grab opportunity that could significantly benefit CRM over the coming years and could increase overall revenue by $4B-plus annually based on our estimates and field work by CY2025,” Ives added.

Wedbush considers Salesforce as a second-derivative beneficiary of the AI revolution. The firm expects Salesforce shares to increase by approximately $40 over the next 12 to 18 months as its AI monetization story takes form.

However, Seeking Alpha analyst Yiannis Zourmpanos, gives Salesforce a Hold rating, as he finds it has a high valuation and revenue growth is slowing.

“Though the sales growth has softened, the company still proves its strength through strong profitability while extending its AI and multi-cloud solutions footprint,” he said in a recent analysis. “Salesforce’s bold push into these innovative areas positions it well for the future. However, with a premium valuation and slower growth, investors must consider whether its stock still justifies the price, leading to our hold rating.”

Salesforce has a Buy rating from both Seeking Alpha and Wall Street analysts. However, it receives a Hold rating from Seeking Alpha’s Quant system, which routinely beats the market.