KeyBanc downgraded Salesforce to a hold-equivalent rating on Thursday and removed its $290 price target, citing weak Agentforce customer feedback and unclear financial trends, sending shares down more than 2% to around $162.50.
KeyBanc Capital Markets downgraded Salesforce on Thursday, removing its $290 price target and cutting the stock to a hold-equivalent rating, citing skeptical customer feedback on the company's Agentforce AI platform and a lack of visible improvement in its financial trends.
Shares of Salesforce fell more than 2% on the session, trading around $162.50, extending a prolonged stretch of losses that has left the stock down roughly 7% over the past month and 38% year to date.
KeyBanc analyst Jackson Ader said field research pointed to two persistent obstacles for Agentforce adoption. "The information we're gathering, both financial and anecdotal, is not rebounding or trending in the right direction," Ader wrote in the note. He said customers consistently report that their data is not organized enough to work meaningfully with AI, and that Agentforce as a product "just isn't there."
Ader was equally blunt about the broader investment case. "We have little to no evidence that compels us to pitch CRM as a strong buying opportunity other than valuation, and when that's the case we think it's time to step back," he wrote.
Salesforce CEO Marc Benioff pushed back quickly. According to a television appearance Thursday, Benioff contacted a prominent market commentator shortly after the note circulated and argued the KeyBanc report was a "bad call," contending it conflicts with evidence that Agentforce is gaining more traction than the firm indicated.
Benioff has made similar arguments in recent weeks. Following the company's May earnings report, he told "Mad Money": "A lot of the predictions that are happening in regards to the 'Saaspocalypse' just haven't happened." In that same report, Salesforce disclosed that Agentforce had reached $1.2 billion in annual recurring revenue, up from $800 million the prior quarter.
Ader acknowledged that growth figure but said he is having difficulty tracing the trend through the company's broader financials — a gap he cited as central to his caution.
The downgrade arrives as Salesforce navigates what analysts have labeled the "SaaSpocalypse" narrative, a concern that AI will erode demand for seat-based enterprise software by enabling customers to build bespoke internal tools. That concern gained fresh currency Thursday when a report surfaced indicating that Starbucks is using AI to develop internal applications that could replace software it currently purchases from outside vendors.
Salesforce reached a multiyear closing low of $150.12 on June 22, after falling for 14 consecutive trading sessions following a brief rebound above $200 in late May and early June.
Defenders of the company's position argue that customer data is deeply embedded in legacy systems, making wholesale replacement of enterprise software platforms far more complicated than the bearish narrative suggests. Salesforce has also pursued a series of acquisitions aimed at strengthening Agentforce's capabilities, positioning the platform as a tool for building AI agents that can autonomously complete tasks within its sales, marketing, and customer service applications.
Ader stopped short of calling the stock a sell, signaling that a more favorable entry point could emerge. The question, he indicated, is one of timing — and for now, his answer is that the moment has not arrived.
How quickly Agentforce's revenue contribution scales relative to headwinds in Salesforce's core seat-based business will likely determine whether the stock can recover meaningful ground before the company's next earnings report.
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