Salesforce Downgraded by KeyBanc on Agentforce AI Doubts

KeyBanc Capital Markets downgraded Salesforce (CRM) from Overweight to Sector Weight, citing concerns that the company's new AI product, Agentforce, is not yet mature enough to drive meaningful revenue. The downgrade sent Salesforce shares down 2.3% on Thursday, as other software stocks also retreated.

Rating Change

• Previous Rating: Overweight
• New Rating: Sector Weight
• Price Target: Not disclosed (previous target of $350 was removed)

Analyst Rationale

The KeyBanc analyst noted that Agentforce, marketed as an AI-powered sales productivity tool, remains in early stages and has not demonstrated clear value to customers. The analyst added that Salesforce faces challenges in converting AI experiments into tangible revenue, undermining confidence in its growth prospects.

Context

The downgrade comes after Salesforce raised its fiscal 2026 guidance in May, which initially boosted the stock. However, the stock has been volatile since, declining about 8% over the past month. Other software companies like ServiceNow (NOW) and Adobe (ADBE) also saw modest declines in the same session.

What to Make of It

KeyBanc's move reflects growing Wall Street skepticism about the ROI of AI investments in traditional software companies. Investors should watch Salesforce's upcoming earnings reports to assess whether Agentforce is gaining traction.