- Salesforce shares climbed Thursday amid signs its AI offerings are taking off, though they remain in negative territory for the year.
- Wall Street analysts are widely bullish on the stock, suggesting investors are underestimating the software giant while waiting to see more evidence of its advances with AI.
Does Salesforce’s new momentum have the stock on track for a comeback?
The shares climbed about 4% to close Thursday near $248, making Salesforce (CRM) one of the top gainers in the S&P 500, a day after the company posted a better-than-expected profit boosted by demand for its AI offerings and hiked its outlook.
The day’s move had the stock at its highest level in about a month. Still, the shares have a way to go before they recover from the losses taken earlier this year amid worries about its company’s outlook. The stock remains down nearly 30% for 2025.
Why This Is Significant
Salesforce’s stock has lagged many of its peers in software this year, missing out on the AI rally that’s boosted shares of a wide range of companies. Thursday’s gains on a stronger outlook and signs that it’s making progress could point to a turnaround.
Morgan Stanley analysts, who reiterated an “overweight” rating and a Street-high target of $405 following the company’s results, told clients they believe investors are underestimating the software giant’s AI potential.
“It may take a few more data points for a skeptical investor base to come on board,” they said. Still, the analysts said they would be buyers at this stage, with signs of a pickup in new AI-related business and easing bookings headwinds.
Analysts at Bank of America pointed to Salesforce’s backlog, which expanded faster than anticipated, as another strong signal of future demand bolstering their bull case and $305 target for the stock.
Jefferies analysts, who maintained a $375 objective and “buy” rating, said they believe the company’s current-quarter forecast could be conservative, leaving room for another upside surprise.
Related Education
While Wall Street’s ratings may be in flux, most analysts are sticking by their support for the stock. Of the 18 analysts surveyed by Visible Alpha, 14 have issued “buy” calls, compared to four neutral ratings. Their mean target around $330 would suggest a near-full recovery to its levels to start the year.