Analysts update Salesforce stock outlook following important meeting
Salesforce's AI Initiatives: Salesforce is promoting its new AI platform, Agentforce, which aims to enhance customer support and sales, but faced backlash for removing the search feature from its Help section, prompting a commitment to reinstate it by November 15.
Financial Performance: In Q2 of fiscal 2026, Salesforce reported a revenue increase of 10% year-over-year to $10.2 billion, with a net income of $1.9 billion, and analysts have raised their free cash flow estimates for fiscal years 2027 and 2028.
Market Expansion Plans: CEO Marc Benioff announced plans to enter the IT service management market with Agentforce, leveraging existing resources, while analysts noted stable demand for Salesforce's Sales and Service Clouds.
Analyst Ratings and Risks: Analysts maintain a buy rating with a target price of $325 for Salesforce shares, citing potential risks from competition, integration challenges from acquisitions, and cyclical spending patterns in enterprise applications.
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Software Stocks Plunge Amid AI Bubble Concerns
- Software Stock Decline: At the start of 2023, the iShares Expanded Tech-Software Sector ETF (IGV) fell 16%, primarily due to investor fears that AI could disrupt the enterprise software market, leading to double-digit declines in stocks of industry leaders like Microsoft, ServiceNow, and SAP, despite their solid earnings reports.
- Surge in AI Investments: OpenAI and Anthropic are raising tens of billions in funding, with Anthropic increasing its target to $20 billion and Amazon negotiating a $50 billion investment in OpenAI, indicating that major tech companies remain optimistic about AI's future, even amid bubble concerns.
- Semiconductor Sector Gains: As software stocks tumble, semiconductor stocks emerge as winners in the AI boom, with funds raised by OpenAI and Anthropic expected to be spent on Nvidia GPUs, further driving growth in the semiconductor industry and highlighting the potential of AI infrastructure development.
- Uncertain Market Outlook: While the software pullback may persist, as long as money continues to flow into OpenAI and Anthropic and their revenues soar, fears of an AI bubble will seem unwarranted, potentially providing new opportunities for investors.

AI Bubble Concerns Rise as Software Stocks Plummet
- Software Stock Plunge: As concerns about an AI bubble rise, software stocks have dropped 16% at the start of the year, with industry leaders like Microsoft, ServiceNow, and SAP experiencing double-digit declines post-earnings, reflecting market fears of AI disrupting enterprise software.
- Investor Confidence Shaken: Despite reporting solid growth, investors are worried that AI could enable customers to build equivalent tools in-house, threatening the market positions of traditional software companies, leading to a sell-off in the software sector.
- Surge in AI Startup Funding: AI startups like OpenAI and Anthropic are attracting massive investments, with Anthropic raising its fundraising target to $20 billion and Amazon negotiating a $50 billion investment in OpenAI, indicating confidence in the AI sector despite bubble fears.
- Semiconductor Sector Benefits: The decline in software stocks is seen as a positive for the semiconductor industry, as the funding raised by OpenAI and Anthropic is expected to be spent on Nvidia GPUs, further driving gains in semiconductor stocks and suggesting that the massive infrastructure buildout will eventually be profitable.






