CRM: AI Will Pressure CRM, But Not Kill It – Upgrading to Buy

Research evidence excerpt

CRM: AI Will Pressure CRM, But Not Kill It – Upgrading to Buy

July 1, 2026

John DiFucci john.difucci@guggenheimpartners.com CRM: AI Will Pressure CRM, But Not Kill It –

212 518 9670 Upgrading to Buy

Richard Magnus

richard.magnus@guggenheimpartners.com

212 518 9308 Key Message: We are upgrading shares of CRM to Buy from Neutral, as we believe

CRM's current valuation of 3.7x Recurring Revenue and 11x EV/NTM Consensus FCF Tamjid Chowdhury

tamjid.chowdhury@guggenheimpartners.com presents an attractive entry point for investors. Our view on CRM remains unchanged:

212 823 6739 despite being a leading AI marketer, neither product traction nor material revenue

contribution is yet visible in our channel conversations or in the reported numbers. Shares

have declined nearly 41% YTD on fears of an impending "SaaSpocalypse." While we do

see AI as a significant risk and view CRM as a company likely to be negatively impacted

CRM BUY bythethestockadventis misalignedof AgenticwithAI,reality.we believeMore therealistically,Armageddonwe underwritescenario currentlya scenariopricedin whichinto

Salesforce, Inc. CRM struggles to grow much, but does not decline much either, while the current stock

Sector: Software price implies that it declines 5% into perpetuity. To be clear, this is not a call that CRM

will be a beneficiary of AI, but we don’t believe it will decline as implied in the current

Rating Change valuation. We are upgrading shares to Buy (from Neutral) with a $228 price target, which

Share Price $156.66 implies 5.0x EV/NTM Recurring Revenue and about 46% upside from current levels.

Price Target $228.00

Prior NA Why Now?

Attractive Valuation. We believe CRM shares are grossly undervalued at 3.7x EV/NTM

Revenue ($B) Recurring Revenue.