Salesforce keeps Buy rating at BofA on growth prospects for Service Cloud

BofA maintained its Buy rating on Salesforce (NYSE:CRM) while taking a deep dive into the company’s largest business, Service Cloud.

The firm has a $350 price target on the stock.

Analysts led by Brad Sills said Service Cloud is due for better growth in the coming quarters. The analysts added that their estimate for fiscal 2026 Service Cloud revenue is $9.7 billion (+8% year-over-year), representing 25% of total subscription revenue.

In the recent first quarter fiscal 2026, growth slowed to 7% from an estimated 9.5% cc in the fourth quarter fiscal 2025. However, after accounting for leap year and rounding, normalized growth was closer to 8.5%, representing a more modest 100 basis point deceleration, according to the analysts.

The analysts believe that Service Cloud growth has bottomed and is due for acceleration to 9% in the coming quarters and likely to trend toward 12% longer term.

Sills and his team said they maintained a Buy rating on Salesforce given their view that top line growth has bottomed and is likely to reaccelerate from here.

The analysts noted that add-ons and Agentforce upsell are promising growth drivers. Service Cloud is expected to capture the most incremental growth in the industry, driven by advantages such — intuitive interface; powerful customization and analytics capabilities; integration acrosssales and service functions; and agentic innovation with the new Agentforce offering.

The analysts added that upsell of add on offerings represent enduring growth drivers, including Service Cloud Voice ($50 to $200 monthly subscription, versus estimated average selling price, or ASP of $238 today), Customer Experience Intelligence ($220 to $250), Field Service ($50 to $75) and Digital Engagement ($75).