Salesforce (CRM +0.51%) has been a leader in cloud software since its inception. In fact, founded as a cloud software company in 1999, it was one of the pioneers in the cloud and has dominated customer relationship management (CRM) software for much of its history.
These days, Salesforce appears to be at another pivot point. Its revenue growth has slowed as the broader software sector matures and digests the COVID-19-induced surge in growth. But it has recently introduced a breakthrough, tapping into the emerging agentic artificial intelligence (AI) technology.
Salesforce introduced Agentforce, its own agentic AI tool, in September. The technology could superpower the company's next stage of growth. Now, one Wall Street analyst seems to be taking notice.
Image source: Getty Images.
TD Cowen upgrades Salesforce to a buy
TD Cowen analyst Derrick Wood upgraded Salesforce from a hold to buy, according to media reports, and lifted his price target from $380 to $400. The investment firm noted the recent pullback in the stock, setting up a buying opportunity for Salesforce. It's noticed high levels of interest in Agentforce among Salesforce's customer base and sees other opportunities for growth.
NYSE: CRM
Key Data Points
Is Salesforce a buy?
Salesforce's guidance for the fourth quarter didn't indicate a bump from Agentforce, as the company forecast 7%-9% revenue growth in the fourth quarter. However, management is clearly bullish on the potential of Agentforce, which it describes as a "complete AI system for enterprises built into the Salesforce platform." CEO Mark Benioff also said products like Agentforce would revolutionize global labor and reshape how industries operate and scale.
With its leadership in CRM, reasonable valuation, and potential breakthrough in agentic AI, Salesforce looks like a smart buy.
