Bank of America has changed its mind on Salesforce Inc.
BofA Securities analyst Tal Liani upgraded Salesforce from Underperform to Buy and raised the price target from $160 to $285.
The new target implies about 24% upside from Friday's close of $229.13. Salesforce shares rose about 3% to around $235 on Monday morning, after touching $240.90.
The question is what convinced a bearish analyst that artificial intelligence could help the software maker rather than replace it.
Why Bank Of America Changed Its View
Liani's earlier concern was disintermediation by AI. That is the risk that AI tools let customers bypass a software vendor's applications.
Conversations with chief information officers changed that view, the analyst said.
Large enterprises appear unlikely to replace the platforms that hold their business logic, data, workflows and compliance rules.
"If anything, AI should deepen dependence on these platforms," Liani said.
Smaller companies may still explore cheaper AI-native applications, according to the note. As a result, the analyst sees a split market.
Salesforce Covers Four Layers of the AI Stack
The upgrade rests on the four-layer strategy Salesforce presented at its Dreamforce conference.
The first layer is data, built on Informatica and Data 360.
The second is the core applications, such as Sales Cloud and Service Cloud.
The third is Agentforce, the platform customers use to build and run AI agents.
The fourth is the interface, which includes Slack and Claudeforce, a product that brings Salesforce data into Anthropic's Claude.
Liani said Salesforce does not need to own every interface to keep its value. Instead, it would need to remain the platform that decides what an agent can access and which actions it can take.
For this reason, the analyst said the "SaaSpocalypse" narrative overstates the risk that Salesforce becomes a commoditized database.
Early Numbers Point to Faster GrowthAI revenue is still small, the analyst said. However, the leading indicators are improving.
In the fiscal 2027 second quarter, Agentforce annual recurring revenue reached $1.5 billion, up more than 240% from a year earlier. Annual recurring revenue is the yearly value of subscription contracts.
About half of quarterly Agentforce bookings came from customers refilling usage credits. According to Liani, that is initial evidence of repeat consumption.
In addition, current remaining performance obligations grew 14% in constant currency. The metric tracks contracted revenue due within 12 months.
Consequently, Bank of America raised its revenue estimates to $50.9 billion for fiscal 2028 and $55.98 billion for fiscal 2029. That implies growth of 9.9% and 10.1%, up from 9.5% and 9.9% previously.
The $285 target values Salesforce at 16 times estimated calendar 2027 free cash flow on an enterprise value basis. The bank previously used nine times.
Salesforce Stock Is Still Down in 2026
Even after Monday's gain, Salesforce shares are down about 11% this year. Meanwhile, the stock has rebounded about 60% from its 52-week low of $146.32, set in June.
According to Benzinga Analyst Ratings, 31 analysts carry a consensus Buy rating and an average price target of $275.
Separately, Salesforce said Monday it agreed to acquire Loops, an AI-powered analytics platform.
