Salesforce Inc. (CRM) shares declined 2.5% on Thursday after KeyBanc downgraded the enterprise software giant, citing concerns that its Agentforce artificial intelligence platform may take longer to become a meaningful growth driver than previously anticipated.
The downgrade comes despite Salesforce's strong position in enterprise software and its better-than-expected fiscal first-quarter results reported in late May. Investors have been closely watching whether the company's AI investments can translate into sustained revenue growth as competition in enterprise AI intensifies.
KeyBanc Cites Slow Agentforce Adoption
KeyBanc downgraded Salesforce to Sector Weight from Overweight on Thursday. Analyst Jackson Ader pointed to customer feedback and channel checks indicating that Agentforce adoption remains in its early stages. According to the brokerage, Salesforce continues to benefit from its incumbency, but evidence suggests that meaningful growth acceleration from Agentforce is further away than expected.
KeyBanc noted that it attends more Salesforce partner and customer events than any other company in its coverage universe. Customer feedback has been consistent on two fronts: customers' data is not yet organized to support meaningful AI work, and Agentforce itself is not yet ready for broad deployment. Implementation partners are only now beginning to convert proof-of-concept projects into pipeline deals.
Additionally, KeyBanc's survey found that more chief information officers expect to deprioritize Salesforce within their IT budgets over the next 12 months than prioritize it. The brokerage also struggled to find evidence in Salesforce's financial disclosures that net-new annual contract value is growing faster than overall annual contract value growth, despite management's comments. “What we can piece together in the disclosed numbers does not signal building momentum,” Ader said.
Ader acknowledged the timing of the downgrade could be poor but added, “But at some point, we have to ask ourselves, why gather the evidence if we’re not going to use it.”
AI Growth Remains Under Scrutiny
The downgrade follows Salesforce's stronger-than-expected fiscal first-quarter earnings in late May, which were supported by demand for AI-powered products, including Agentforce. The company reported closing 98 deals worth more than $1 million in annual contract value during the quarter. Publicly disclosed Agentforce customers include PepsiCo, Falabella, and Singapore Airlines.
However, Salesforce's second-quarter revenue guidance came in slightly below Wall Street expectations, raising concerns that rapidly advancing AI products from rivals such as OpenAI and Anthropic continue to pressure demand for enterprise software. KeyBanc noted it had previously pushed back against negative sentiment surrounding software-as-a-service companies, highlighting the advantages of incumbent platforms like Salesforce, but the latest customer checks prompted a revision.
Mixed Outlook for Salesforce Shares
On Wednesday, Salesforce announced that the US Air Force 441st Vehicle Support Chain Operations Squadron began using its Missionforce National Security platform to manage a fleet of over 84,000 vehicles across nearly 389 locations. Despite Thursday's decline, Wall Street sentiment remains broadly positive. More than 70% of analysts covering Salesforce rate the stock a Buy, with an average price target of $241.08, implying roughly 45% upside from Wednesday's closing price of $166.58.
Still, Salesforce has struggled this year. The stock has fallen 35% in 2026 and recently hit a 52-week low amid a record 14-day losing streak that deepened AI fears. For broader context, see our coverage on Salesforce Hits 52-Week Low as Record 14-Day Losing Streak Deepens AI Fears and Marvell Surges 8% on KeyBanc Target Hike, 5M Photonic Chip Milestone.
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