Bernstein Maintains Underperform Rating on Salesforce (CRM)

Mark Moerdler, an analyst from Bernstein, maintained an Underperform rating on Salesforce, Inc. (NYSE:CRM) on May 29, raising the price target from $243 to $255.

The rating update followed the company’s fiscal Q1 2026 earnings release, which took place on May 28. The analyst attributed the rating to the company’s growth prospects and current market position.

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While Salesforce, Inc. (NYSE:CRM) reported an in-line quarter, with revenue experiencing 8% year-over-year growth and exceeding expectations, the analyst reasoned that these results were largely driven by favorable foreign exchange impacts rather than the underlying business performance.

Similarly, while the analyst acknowledged Salesforce, Inc.’s (NYSE:CRM) recent acquisition of Informatica for $8 billion as a positive move to bolster its AI position, it did not notably alter the overall financial outlook for the company.

Moerdler expressed concerns that the company’s growth prospects may be overly optimistic, considering that Salesforce, Inc. (NYSE:CRM) operates in a mature market. He expects the company’s subscription revenue growth to slow over time, with increasing margins posing more challenges.

Additionally, the CRM’s mature business status and valuation as a high-growth entity do not align, which can lead to considerable downside risk and limited upside potential.

While we acknowledge the potential of CRM as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than CRM and that has 100x upside potential, check out our report about the cheapest AI stock.

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