Salesforce AI Transformation Struggles to Boost Stock, Morgan Stanley Cautions

Salesforce has invested heavily in artificial intelligence to modernize its business, but analysts warn that the stock will likely remain under pressure until the company demonstrates more tangible results from its AI initiatives. Morgan Stanley has downgraded Salesforce to equal-weight from overweight and reduced its price target from $287 to $185, implying modest upside of about 6% from the recent close. In premarket trading the shares fell nearly 4% following the announcement. Analyst Adam Wood notes that while Salesforce is positioning itself for an “agentic” future, early performance metrics such as Agentforce adoption have yet to produce a clear growth inflection, and legacy portfolio drag continues to weigh on organic growth. The stock is currently trading at roughly 19 times earnings, reflecting a balanced risk‑reward profile. Salesforce’s shares have declined about 34% year‑to‑date as investors shift away from software stocks amid concerns that AI could erode demand for traditional services. The company has responded by cutting roughly 4,000 jobs and integrating AI through its Agentforce platform, as well as acquiring Fin, an AI‑focused customer service startup for over $3 billion. While the strategic pivot is seen as appropriate, monetization remains early, and growth impacts are expected to materialize only over time. Morgan Stanley’s stance diverges from the broader Wall Street consensus, where 40 of the 53 analysts covering Salesforce maintain buy or strong‑buy ratings.

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