The Guggenheim Against the Trend: Salesforce, Inc. (CRM.US) valuation is wrongly killed by "SaaS Doomsday," AI is pressure rather than a death knell.

Notice that, in the technology stock landscape on Wall Street, the pioneer of SaaS Salesforce, Inc. (CRM.US) is experiencing an unprecedented psychological war. Due to market concerns about generative AI, especially "intelligent agent AI," reshaping the enterprise software ecosystem, Salesforce, Inc.'s stock price faced a dramatic valuation correction in 2026. However, with the investment bank Guggenheim recently upgrading the stock from "neutral" to "buy," the debate on Wall Street about whether "AI is its catalyst or death knell" has once again reached a climax. Led by analyst John Defucci, the Guggenheim analyst team stated that they upgraded the stock due to their belief that the current valuation of the company is an attractive entry point for investors. In addition to the upgrade, the firm set a target price of $228 for Salesforce, Inc., while pointing out that "AI will bring pressure to the company, but it will not destroy it." Defucci said, "Our view on Salesforce, Inc. remains unchanged: despite being a leading AI marketer, we have not seen substantive market acceptance of its products in our channel research or financial data, nor have we observed significant revenue contributions. Influenced by the panic of the impending 'SaaS industry collapse,' the stock has fallen by nearly 41% since the beginning of the year. While we do consider AI a significant risk and view CRM as a company that may be negatively impacted by the emergence of proxy AI, we believe that the doomsday scenario priced into the current stock price does not align with reality." The analysts added that a more realistic scenario is that the company may experience long-term low growth (0%-5%), but it will not suffer a significant decline, and the current stock price implies a permanent annual decline of 5%. "It should be clarified that this is not asserting that Salesforce, Inc. will benefit from AI, but we do not believe it will decline as the current valuation implies," the analysts said. "SaaS Doomsday" or Overblown Fear? Over the past year, Wall Street has been filled with a pessimistic sentiment known as "SaaS Doomsday." Bears believe that when underlying large models like Anthropic and OpenAI can directly execute complex tasks, generate customer reports, and interact with databases through intelligent agent AI, companies may no longer need expensive and cumbersome traditional hierarchical CRM systems like Salesforce, Inc. The emergence of intelligent agent AI is fundamentally threatening the "per account" fee-based business model that Salesforce, Inc. has relied on for survival. Microsoft Corporation is putting direct competitive pressure on Salesforce, Inc. by deeply integrating AI capabilities into the Dynamics 365 platform through Copilot. In addition, competitors like ServiceNow and SAP are also accelerating their AI strategies, attempting to grab a share of the enterprise software market. It is this "technological disruption theory" that has caused Salesforce, Inc.'s stock price to decline by nearly 41% year-to-date. Guggenheim analyst Defucci stated that, although Salesforce, Inc. is heavily marketing its AI products (such as Agentforce and the newly launched AgentExchange platform), its substantive revenue contribution and product attractiveness have not yet been evident in their financial reports and channel research. However, this does not mean that Salesforce, Inc. is heading towards extinction. On the contrary, the current market pricing has extreme assumptions that Salesforce, Inc. will "permanently decline by 5% annually." Guggenheim believes that a more realistic benchmark scenario is that Salesforce, Inc. may face long-term low growth (0%-5%) in the future, but due to its large enterprise customer base, high migration costs, and the barrier as the "core of enterprise data," it will not easily collapse. In essence, AI is a chronic stress test for Salesforce, Inc., but the market has sentenced it prematurely with a "doomsday" scenario, creating an attractive valuation gap. Of particular note, Salesforce, Inc. is transitioning from the traditional "per account" model to "outcome-based pricing," introducing a new billing metric called "Agentic Work Units" (AWUs) that directly quantifies the business value of tasks completed by AI. As of now, the platform has completed 2.4 billion AWUs, representing a 57% growth. Intense Standoff between Bulls and Bears In terms of ratings, Salesforce, Inc. has become one of the most contradictory targets in analysts' eyes. While the overall consensus rating remains at "buy," the gap between the highest and lowest target prices among the 30+ brokerages covering the stock is striking. Represented by Wedbush, Needham, and Morningstar, the bull camp continues to applaud Salesforce, Inc.'s future. Needham has given an extremely optimistic target price of up to $400. Bulls believe that Salesforce, Inc. is not sitting idle in the AI era; its AI intelligent agent platform Agentforce has crossed the $1 billion annual recurring revenue (ARR) milestone, demonstrating its monetization capabilities are gaining traction. Furthermore, the company's acquisitions of AI startup Fin (formerly Intercom) for $3.6 billion, and the launch of the unified intelligent agent marketplace AgentExchange, are positive signs of its proactive shift to an "AI-first" approach. Morningstar emphasizes that as the absolute ruler of the "Customer 360" ecosystem, Salesforce, Inc.'s data reservoir is irreplaceable by AI. Guggenheim (target price $228) and Barclays (target price $236), among others, belong to the value camp that buys in because of cheap prices. They do not blindly praise how much Salesforce, Inc. can benefit from AI but see the defensive value brought by its P/E ratio of around 18 and large-scale buyback plans (such as the recent $25 billion accelerated stock buyback, canceling nearly 10% of outstanding shares). As Defucci put it, "This is not asserting that Salesforce, Inc. will benefit from AI, but we do not believe it will decline as the current valuation implies." In contrast, Jefferies and Bernstein have shown more pessimism. Jefferies recently downgraded Salesforce, Inc. to "neutral" with a target price cut to $166, while Bernstein maintained an "underperform" rating with a target price lowered to $173. Short sellers firmly point out that outside of acquisitions, the organic growth of Salesforce, Inc.'s core subscription business has slowed to single digits, and AI implementation will not substantially change total revenue in the next few years, with traditional moats being eroded by new AI architectures. Future Outlook The fate of Salesforce, Inc. will largely depend on whether Agentforce can truly transition from a "pilot project" to a "production-level tool." Currently, over 60% of Agentforce and Data 360 orders come from existing customer expansions, indicating that cross-selling strategies are working. The company has also announced a $50 billion stock repurchase plan and raised its quarterly dividend to $0.44 per share, demonstrating management's confidence in cash flow. Investors will need to watch for two key data points in the future: whether software sector subscription revenue can "stabilize" as expected by Guggenheim in 2026, and whether Agentforce's ARR can continue to maintain triple-digit growth in the 2027 fiscal year.