Salesforce: BofA Issues Underperform Rating — AI Threat to Per-Seat Revenue Model

Salesforce: BofA Issues Underperform Rating — AI Threat to Per-Seat Revenue Model

Bank of America analyst Tal Liani reinstated coverage of Salesforce on May 18, 2026 with a rare Underperform rating and a $160 price target — roughly 8% below the stock's then-price of $179 and far below the $268 analyst consensus. The downgrade crystallizes the bear case that AI agents threaten Salesforce's core per-seat subscription model.¹

BofA's three pillars of the bear case:

1. Muted net new customer additions — most Fortune 500 companies are already on the platform, limiting expansion.
2. Limited upsell potential — the installed base is saturated.
3. "Underwhelming" AI monetization pathway — Agentforce's pricing architecture may cannibalize seats rather than add to them, compressing the very revenue model that built Salesforce into a $170B company.

Salesforce by the numbers (May 2026):

• Stock down ~33% YTD, between 52-week low of $163.52 and high of $289.90
• Agentforce ARR: ~$800 million (169% YoY increase, but only ~2% of quarterly revenue annualized)
• 29,000 Agentforce deals closed in first 15 months
• Combined Agentforce + Data 360 ARR (incl. Informatica): $2.9B, up 200%+ YoY
• Fiscal 2026 revenue: $41.5B (+10% YoY); FY27 guidance: $45.8B–$46.2B
• $72.4B in total remaining performance obligations (contracted, unrecognized revenue)
• CEO Marc Benioff disclosed Salesforce will spend ~$300M on Anthropic tokens in 2026, mostly for coding

Institutional sentiment is split: Starboard Value exited its CRM position in Q1 2026; DNB Asset Management raised its stake by 25%; Michael Burry disclosed a new CRM position in April. CRM trades at a forward P/E of ~14x, pricing in significant skepticism.

Four things bulls need to happen: Agentforce ARR compounding, net new customer growth resuming, hybrid pricing working (consumption + seats), and operating margins holding above 30%. The May 27 earnings report is the next major checkpoint.