Is Salesforce’s AI story cracking, or is Wall Street giving up on Agentforce far too early?
Why Did KeyBanc Downgrade Salesforce?
KeyBanc Capital Markets analyst Jackson Ader cited deteriorating evidence across multiple channels: customer checks, CIO survey results, and financial disclosures. ‘Our checks and customer conversations have not been strong, nor has the feedback been on Agentforce,’ Ader stated bluntly. He added, ‘Agentforce, as a product, just isn’t there’ — a stark reversal from Salesforce’s own narrative of AI leadership. The firm removed its price target and lowered earnings estimates, citing lack of visible Annual Order Value (AOV) growth and inconsistent monetization of the $3.6 billion Fin acquisition. Notably, Ader acknowledged the awkward timing — CRM has fallen 37% YTD and is up only 14% from its March lows — but insisted, ‘At some point, we have to ask ourselves, why gather the evidence if we’re not going to use it?’
How Does This Salesforce Agentforce Downgrade Compare to Peers?
The downgrade didn’t occur in isolation. Shares of ServiceNow, Workday, and Adobe slid alongside CRM, reflecting broad-based software sector pressure. While NVIDIA surged 3.1% on AI infrastructure demand and Apple edged higher on services momentum, enterprise software stocks face a valuation reckoning. Salesforce trades at just 11x forward earnings — down from its historical 31x multiple — while peers like ServiceNow (NOW) and Adobe (ADBE) trade at 24x and 27x, respectively. Unlike hardware enablers benefiting from hyperscaler capex (e.g., Micron, Tesla-affiliated data center suppliers), CRM remains a ‘check-writer’ in the AI stack — a structural headwind highlighted by Wall Street Journal analysts during Thursday’s market commentary.
Is Agentforce Really Failing — Or Just Delayed?
Salesforce reported $1.2 billion in annual recurring revenue from Agentforce products in Q1 — up from $800 million in Q4 — and subscription revenue from Agentforce apps rose 9% to $6.91 billion. Yet KeyBanc argues this growth masks stagnation: much of the lift came from Slack and bundled offerings, not net-new Agentforce adoption. Meanwhile, core units like Tableau and MuleSoft continue to underperform, and the Informatica integration remains unprofitable. Barron’s had already dropped its Buy rating last month, warning CRM’s high-growth era may be over. Guggenheim’s recent upgrade to Buy — with a $228 target — now looks increasingly contrarian, as the firm admitted, ‘This is not a call that CRM will be a beneficiary of AI, but we don’t believe it will decline as implied in the current valuation.’
What’s Next for Salesforce Investors?
It’s possible we’re downgrading Salesforce at exactly the wrong time, but at some point, we have to ask ourselves, why gather the evidence if we’re not going to use it.— Jackson Ader, KeyBanc Capital Markets
With 36 of 54 analysts still rating CRM a Buy (median target: $241.08), the Salesforce Agentforce Downgrade highlights a deepening divergence in Wall Street sentiment. Goldman Sachs and Cantor Fitzgerald maintain bullish stances, but KeyBanc’s move signals growing concern that AI monetization is further out than expected — or may never materialize at scale. The company’s upcoming Q2 2026 earnings report, due in early August, will be scrutinized for Agentforce adoption metrics, gross margin trends, and commentary on the Fin acquisition. For now, CRM’s technical indicators remain weak: a Relative Strength Rating of just 12 and Composite Rating of 54 out of 99 per Investor’s Business Daily. The stock’s Accumulation/Distribution Rating of B-plus suggests modest institutional support — but not conviction.
