Investing.com -- Bank of America (NYSE:BAC) analysts believe Salesforce (NYSE:CRM) stock has more upside potential this year, citing an optimistic growth outlook driven by the company’s new AI offering, Agentforce, and a more favorable spending environment.
Despite the stock's impressive performance in 2023 and 2024, with gains of 98.5% and 27.1% respectively, Salesforce shares still trade at a discount compared to its peers.
According to BofA, the company's stock is valued at 19 times the calendar year 2026 (CY26) estimated free cash flow (FCF), compared to 27 times for the Growth at a Reasonable Price (GARP) group.
Slowing revenue growth has been a concern for investors, with an 8% increase in the third quarter of fiscal year 2025 (FY25), down from 18% in FY23.
However, BofA forecasts a revenue growth acceleration to 12-13% year-over-year by the second half of FY26, driven by “1) a better spending environment and 2) Agentforce,” analysts Brad Sills and Carly Liu said.
The analysts note that the software spending cycle, which began to slow in the second quarter of CY22, is showing signs of relief. This easing of pressure is evidenced by a more positive tone from the System Integrator (SI) channel and software companies surpassing top-line outlooks.
Drawing parallels with the post-great recession period, analysts expect a 1 percentage point boost to the company's base case committed remaining performance obligations (cRPO) growth estimate of 10% in the first half of the year.
In terms of Agentforce's potential contribution, BofA estimates that the new service could add 2 percentage points to year-over-year subscription revenue growth by the second half of FY26 in an optimistic scenario.
This estimate is based on incremental subscription revenue of $675 million for FY26 and $1.6 billion for FY27.
Although it is still early in the Agentforce cycle, the groundwork for deployment has been set with Data Cloud, and channel feedback indicates an increase in Data Cloud deals attached to renewals for use with Agentforce.
“With Agentforce launching in October 2024 and 9 to 12 month sales cycles for the average Salesforce deal, we estimate 1% to 2% points incremental NRR and revenue growth from Agentforce occurring as early as Q3FY26, bringing the growth rate to 12% to 13%,” analysts concluded.