"AI Disrupts Everything" Narrative Kills Salesforce, Inc. (CRM.US)! Citi Lowered Target Price, Market Repricing Traditional Software Growth Trajectory.

Wall Street financial giant Citigroup (Citi) has lowered its target price for the American cloud software giant Salesforce, Inc. (CRM.US), which specializes in customer relationship management software (CRM), from $200 to $188 before the release of the company's first quarter financial report for the 2027 fiscal year, maintaining a "neutral" rating that is relatively cautious. As of last Friday's closing of the U.S. stock market, Salesforce, Inc. stock closed at $181.82. Citigroup's reduction of the target price for Salesforce, Inc. highlights the current market expectations for the company's fundamental prospects are shifting from the initial optimistic sentiment of "AI-driven stronger growth trajectory" to a cautious re-pricing phase of "AI completely disrupting traditional SaaS business models". The cautious logic behind this is based on the risk aversion changes in the context of emerging AI startups like Anthropic leading the "AI disrupts everything" trend. "We reiterate our 'neutral' rating for Salesforce, Inc. and slightly lower our expectations for the 2027 fiscal year performance to the lower end of the performance guidance range, based on our actual research results showing significantly extended trading cycles and enhanced renewal optimization data (especially with Tableau and Marketing Cloud). " Citigroup's analyst team stated in a report to investors on Tuesday. "The Agentforce intelligent agent remains a driver for customer conversations, but we have not found any significant signs of large-scale adoption by customers. We expect the first quarter performance to roughly meet expectations and reaffirm the full year 2027 fiscal year performance range guidance, but anticipate that the second quarter organic cRPO contract growth guidance will slow to around 8-8.5% year-over-year on a constant currency (CC) basis. We are also slightly lowering core estimated financial data for the 2027 fiscal year to the lower end of the guidance range or to lower growth areas. " The Citigroup analyst team stated. "Although Salesforce, Inc.'s AI product line (such as Agentforce) is beginning to gain more share in customer conversations, the actual large-scale adoption and overall revenue contribution are not yet clearly significant, and investors are starting to take a more cautious stance on future growth paths." "The theme of 'AI disrupts everything' has also raised questions among investors about whether traditional SaaS models can truly be reshaped by AI businesses, and this shift in perception is affecting overall software industry valuations and risk preferences. " The Citigroup analyst team stated. It is understood that Citigroup has slightly lowered its adjusted earnings per share (EPS) growth expectations for Salesforce, Inc. for the fiscal year: from $13.18 to $13.11 for the 2027 fiscal year, from $14.82 to $14.57 for the 2028 fiscal year, and from $16.97 to $16.41 for the 2029 fiscal year. "We expect the company's first quarter performance data to generally meet or slightly fall below the company's previously stated growth levels and do not anticipate an increase in full-year 2027 fiscal year targets at the earnings conference," the Citigroup analyst team pointed out. "The first quarter organic cRPO growth rate is expected to meet expectations, at around 9% year-over-year on CC, while we expect second quarter performance guidance to slow slightly to 8-8.5%." Salesforce, Inc. is planning to release its first quarter fiscal year 2027 earnings report after the U.S. stock market closes on May 27th (Wednesday). The consensus estimate compiled by the Seeking Alpha research platform is for first quarter adjusted earnings per share of $3.12, which implies an expected EPS growth rate of about 21%, with GAAP earnings per share of $1.79, and revenue of approximately $11.06 billion, indicating a potential year-over-year growth of about 13%. Can AI really "disrupt everything"! Behind Anthropic's soaring valuation is the pricing reset of the software application layer in the era of intelligent agents Enterprises' urgent need to increase efficiency and reduce operating costs has recently led to a significant push for the widespread use of two core types of AI applicationsgenerative AI applications and AI intelligent agents. Among them, AI intelligent agents (or AI agents) that autonomously perform various tedious and complex tasks are likely to be the ultimate trend in AI applications in the next decade. The emergence of AI intelligent agents signifies that artificial intelligence is evolving from an information-assistant tool into a highly intelligent productivity tool, which is why Anthropic's valuation has soared to $1 trillion and surpassed OpenAI. Anthropic's AI intelligent agent tool, launched in February this year, can be considered a key trigger for the panic selling of software stocks. However, more accurately, it is not that Anthropic "singly disrupts the entire software stocks," but rather its Claude agent-based AI tool has made the market suddenly realize that large model companies are thoroughly disrupting the enterprise application layer from being "bottom-line model suppliers," potentially eroding the profit pool of traditional SaaS software companies focused on sectors such as legal, sales, marketing, data analytics, low-code editing, etc. The price decline of Salesforce, Inc. by nearly 40% since the beginning of this year can be seen as a reflection of the higher growth proof threshold faced by traditional software/Internet operations companies in the AI era. The pessimistic tone of "AI disrupts everything" since February is mainly due to the market's growing concern that AI agent workflow systems like Claude Cowork and OpenClaw (formerly known as Clawdbot, Moltbot) may weaken the revenue model of the entire software empire based on the SaaS seat subscription model, leading to a rare sell-off among software stocks in February and a subsequent rapid spread to sectors such as network security, online education, traditional finance, insurance, real estate, transportation systems, and any other industries that appear to be revenue model-focused or labor-intensivemarket believes that these industries will be completely disrupted by AI. After participating in the HumanX Global Artificial Intelligence Conference in San Francisco, analysts from the international investment giant UBS Group AG recently stated that the two global leaders in cutting-edge AI applicationsOpenAI and Anthropicare transforming from AI big model super giants into "devourers" of enterprise IT budgets. The UBS Group AG analysts wrote that the launch of more comprehensive AI big models by global cutting-edge AI companies like Anthropic and OpenAI indeed poses a significant threat to the fundamental growth prospects of most traditional software companiesthey have strong capabilities to take a larger share of enterprise clients' wallet from them. Enterprise wallet share mainly refers to the portion of expenditure taken by a technology industry supplier from the total IT/software/digital budget of enterprise clients. According to the UBS Group AG analyst team, the enterprise clients that originally spent large amounts on enterprise-level IT for traditional software vendors are now having more of their budget taken by cutting-edge AI companies like OpenAI and Anthropic. Microsoft Corporation's early $13 billion investment in OpenAI and its internal $920 billion strong target return goal, combined with Anthropic's explosive revenue growth trajectory, collectively reflect an incredibly optimistic commercial path for AI intelligent agents and leading enterprise AI applications. In the announcement last month, Anthropic stated that its Annualized Recurring Revenue (ARR) has exceeded $30 billion, a significant increase from the $9 billion at the end of 2025; while the research firm Semi Analysis reported in early May that Anthropic's ARR has risen to around $44 billion. This growth rate far exceeds that of OpenAI during the same period. The latest research by MarketsandMarkets shows that the AI intelligent agent market is expected to reach up to $53 billion by 2030, indicating an annual compound growth rate (CAGR) of up to 46% since 2025.