Bernstein SocGen Group raised its price target on Salesforce.com to $195 from $173 on Thursday, maintaining an Underperform rating as the firm highlighted AI-driven momentum in the company's enterprise software portfolio.
The upgrade follows Salesforce's fiscal second-quarter 2027 results, which exceeded expectations with adjusted earnings per share of $5.90, surpassing analyst projections of $3.27. Revenue reached $11.3 billion, an 11% year-over-year increase and a record for the company. Free cash flow surged 81% to $1.1 billion, while full-year revenue guidance was raised to a range of $46.1 billion to $46.4 billion.
AI initiatives contributed significantly to performance, with Agentforce annual recurring revenue reaching $1.5 billion, up 240% year-over-year. Cloud revenue grew 14% in constant currency to $33.5 billion. Bernstein noted that while AI products such as Agentforce, Slack, and Claudeforce are driving growth, core segments including Marketing, Commerce, and Tableau are slowing.
The firm questioned whether Salesforce can achieve organic growth acceleration beyond 6% to 8% without acquisitions, despite delivering a 40-basis-point organic increase in the quarter. Salesforce is currently trading at a P/E ratio of 23.86 and a PEG ratio of 0.6, with gross profit margins maintained at 77.6%.
Bernstein's rating remains cautious, emphasizing that while AI adoption supports valuation, core business challenges may limit upside potential.
