One Wall Street firm sees Salesforce Inc. (NYSE:CRM) as an early enterprise-AI winner based on its open-platform strategy. On September 2, Cantor Fitzgerald analyst Matthew VanVliet raised the price target on Salesforce Inc. (NYSE:CRM) to $300.00 (from $250.00) while maintaining an Overweight rating.
The call followed a Salesforce webinar focusing on AI momentum, headless strategy, Slackbot, Claudeforce, and evolving pricing and packaging. Chief Commercial Officer Bill Patterson and President of Sales Connor Marsden provided brief presentations and took questions and answers.
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Salesforce’s Position in the Enterprise Tech Stack
Cantor believes that artificial intelligence isn’t displacing Salesforce. Instead, the company can remain the underlying enterprise platform even as customers begin using other models or platforms on top of it.
The company’s open platform strategy, Cantor believes, will offer customers greater flexibility in choosing AI models as they suit them. This could, in turn, ultimately keep Salesforce cemented in the enterprise tech stack with customers having less reason to switch or even reassess their CRM usage.
This way, Salesforce could counter fears related to AI disintermediating Software as a Service that have been weighing on software stocks. Customers would be able to build around Salesforce instead of bypassing it.
A Higher Valuation may not be Justified
A 20% price target increase built on higher conviction is soft evidence. In simple words, it’s not necessary that Salesforce’s strategic position in the enterprise tech stack may be strong enough to translate into incremental growth and ultimately justify a higher valuation.
The top line growth that Salesforce has been reporting recently isn’t all organic. Part of this growth is coming from acquisitions, including Informatica. Informatica contributed around $456 million to second-quarter revenue. Management noted that the acquisition contributed around 4 percentage points to reported growth during the quarter.
Sentiment on enterprise AI adoption may also start cooling, which means that the re-rating may move in either direction.
Hedge Funds Are Bullish on Salesforce
Hedge funds are bullish on Salesforce. As of the second quarter, 99 hedge funds held positions in the stock, an insignificant decline from 101 in the previous one. As for short interest, CRM had a short interest of 26.5 million shares sold short, a representation of 3.35% of the public float.
Overall, Cantor believes that sentiment for Salesforce has been improving because of its position in the enterprise tech stack. The open-platform strategy can help Salesforce become more embedded in the ecosystem. Agentforce ARR exceeding $1.5 billion, up more than 240% year-over-year, strengthens that argument as well.
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