Salesforce falls after raising fiscal 2027 outlook
Salesforce shares fell more than 3% Thursday even after the company raised its fiscal 2027 revenue outlook to the high end of its prior range. J.P. Morgan said investor-day updates pointed to AI monetization opportunities and higher spending from Agentforce customers.
Salesforce Inc. (NYSE: CRM ) stock fell more than 3% Thursday after the software company lifted its fiscal 2027 revenue outlook to the high end of its prior range. According to Pro, investors may have wanted a bigger increase. J.P.
Morgan said the investor day pointed to rising AI monetization opportunities, premium upgrades and higher spending among Agentforce customers. Analyst Samik Chatterjee kept an Overweight rating and a $265 December 2027 price target. Chatterjee said the event reinforced J.P. Morgan's view that Salesforce can generate more revenue from its installed customer base through premium upgrades, Agentforce adoption and higher AI usage.
Salesforce's top 100 Agentforce customers by average weekly users produced more than 2 times the annual recurring revenue within 18 months of launch. Premium license ARR has also topped $1 billion. The premium mix rose to 5% in the fiscal second quarter of 2027 from 1% in the fiscal first quarter of 2025. The economics of premium upgrades also stood out.
Upgrades Salesforce said customers moving to Agentforce 1 Edition can see a 60% to 80% increase in average selling prices. The company said customers that upgraded more than half of their Sales and Service seats generated about 1.4 times total ARR. J.P. Morgan estimated that every 1% of Salesforce's customer base that moves from core products to premium tiers represents roughly $100 million in opportunity.
Salesforce reaffirmed its target for more than $63 billion in fiscal 2030 revenue. Management said organic growth remains on track to accelerate in the second half of fiscal 2027 and beyond. However, it did not issue formal fiscal 2028 guidance. J.P.
Morgan also said Salesforce is gaining traction among AI-native companies. Nine of the top 10 AI companies use Salesforce, while ARR from that cohort jumped 435% year over year. CRM seat growth rose 62% among those customers, while Slack adoption reached 100%. Still, premium products account for only 5% of the installed base.
J.P. Morgan said the pace of customer migration to higher-priced Advanced and Max editions will be key to realizing the opportunity. Salesforce carries a Buy consensus rating with an average price. Stifel kept a Buy rating on Salesforce and lifted its price forecast to $300 from $272.65 on Thursday, while Citigroup held a Neutral rating and raised its target to $263.
RBC Capital reiterated Sector Perform and kept its $250 forecast. Salesforce is a major holding in several technology-focused ETFs, including 6.60% of the iShares Expanded Tech-Software Sector ETF (BATS: IGV), 6.11% of the First Trust Dow Jones Internet Index Fund (NYSE: FDN) and 6.53% of the Invesco BuyBack Achievers ETF (NASDAQ: PKW). Salesforce shares were down 3.27% at $242.35 at the time of publication on Thursday, according to Pro data.