BofA Upgrades Salesforce to Buy, Raises Price Target from $160 to $285
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Bank of America jumped Salesforce straight from Underperform to Buy, lifting its price target from $160 to $285 — the core thesis: AI won't replace enterprise software platforms; it will make companies more dependent on them.
Why did the rating jump two notches at once?
BofA analyst Tal Liani argues that large enterprises pushing AI adoption are unlikely to rip out the platforms that manage their data, workflows, and compliance.
This means → AI adoption doesn't displace Salesforce — it deepens enterprise reliance on it, driving higher usage, premium-tier upgrades, and longer renewal cycles.
In plain terms = AI is Salesforce's accelerator, not its replacement. That single judgment flipped BofA's entire stance from bearish to bullish.
How does the $285 target break down?
The new target implies 16× Salesforce's estimated FY2027 free cash flow, up from 9× previously.
At 16×, Salesforce trades above the peer-group average of 15× — BofA is granting it a premium.
This means → BofA isn't just calling a short-term bounce; it believes the market undervalues Salesforce's long-term earnings power.
How much did the revenue forecasts move?
Subscription-and-support revenue growth estimates rose to 10.4% for FY2028 and 10.5% for FY2029, up from 9.9% and 10.2%.
The report also flagged two improving signals: rising net-new annualized deal value and strengthening Slack performance.
In plain terms = the bump looks small — under one percentage point — but for a company Salesforce's size, each extra half-point translates to hundreds of millions in incremental revenue.
Where is the risk?
BofA itself warns that slower-than-expected AI adoption remains the key near-term risk.
Salesforce's AI-related revenue is still small in absolute terms, and monetization is unproven.
This means → the upgrade is essentially a conviction-first call — the logic holds, but the numbers haven't caught up yet. Whether AI revenue scales meaningfully over the next few fiscal years is the make-or-break test for this thesis.
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