Salesforce Inc. (CRM) shares fell 2.5% on Thursday after KeyBanc downgraded the software company, citing concerns that its Agentforce artificial intelligence platform may take longer than expected to become a meaningful growth driver.
The downgrade came despite Salesforce’s strong position in enterprise software and follows the company’s better-than-expected fiscal first-quarter results reported in late May.
Investors have remained focused on whether the company’s AI investments can translate into sustained revenue growth as competition in enterprise artificial intelligence intensifies.
KeyBanc cites slow Agentforce adoption
KeyBanc downgraded Salesforce to Sector Weight from Overweight on Thursday, with analyst Jackson Ader pointing to customer feedback and channel checks that suggest Agentforce adoption remains in its early stages.
According to the brokerage, Salesforce continues to benefit from its position as an incumbent platform provider, but evidence indicates that meaningful growth acceleration from Agentforce is further away than previously expected.
The firm said it attends more Salesforce partner and customer events than any other company in its coverage universe.
Customer feedback has been consistent in two areas, according to KeyBanc.
Customers’ data is not yet organized to support meaningful AI work, while Agentforce itself is still not ready for broad deployment.
The brokerage added that implementation partners are only now beginning to convert Agentforce proof-of-concept projects into pipeline deals.
KeyBanc also said its survey found that more chief information officers expect to deprioritize Salesforce within their IT budgets over the next 12 months than prioritize it.
The brokerage further noted that it has struggled to find evidence in Salesforce’s financial disclosures showing that net-new annual contract value is growing faster than overall annual contract value growth, despite management’s comments.
“What we can piece together in the disclosed numbers does not signal building momentum,” Ader said.
Ader also acknowledged the timing of the downgrade saying it could be at a poor time.
“But at some point, we have to ask ourselves, why gather the evidence if we’re not going to use it,” he added.
AI growth remains under scrutiny
The downgrade comes after Salesforce reported stronger-than-expected fiscal first-quarter earnings in late May, supported by demand for its AI-powered products, including Agentforce.
The company said it closed 98 deals worth more than $1 million in annual contract value during the quarter.
Publicly disclosed Agentforce customers include PepsiCo, Falabella and Singapore Airlines.
However, Salesforce’s second-quarter revenue guidance came in slightly below Wall Street expectations, raising concerns that rapidly advancing AI products from rivals such as OpenAI and Anthropic continue to pressure demand for enterprise software.
KeyBanc noted that it had previously pushed back against negative sentiment surrounding software-as-a-service companies, highlighting the advantages that incumbent platforms such as Salesforce possess.
However, the firm’s latest customer checks prompted it to revise its view.
Mixed outlook for Salesforce shares
On Wednesday, Salesforce announced that the US Air Force 441st Vehicle Support Chain Operations Squadron (VSCOS) had begun using the company’s Missionforce National Security platform to manage a fleet of more than 84,000 vehicles across nearly 389 locations.
Despite Thursday’s decline, Wall Street sentiment remains broadly positive.
More than 70% of analysts covering Salesforce rate the stock a Buy, with an average price target of $241.08, implying roughly 45% upside from Wednesday’s closing price of $166.58.
Still, Salesforce has struggled this year. The stock has fallen 35% in 2026.
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