Salesforce Inc. gave a long-term outlook for sales that exceeded analysts’ estimates, signaling to investors that the software company can boost revenue growth in the face of competition from artificial intelligence tools. Despite the strong outlook, the shares of Salesforce were under pressure in the previous session.
Salesforce has set a $63 billion revenue target for fiscal 2030, exceeding the average analyst estimate of $61.4 billion, as the software giant seeks to sustain growth amid rising competition from AI tools.
UBS has also raised its price target for Salesforce to $260 from $240, while retaining a Neutral rating. However, the brokerage lowered its fiscal 2028 revenue growth estimate, indicating that the company’s progress towards the FY30 target could be more back-end loaded than previously expected.
The mixed signals came as Salesforce shares extended their decline for a fourth straight session. The tech stock fell 2% to $237.92, taking its four-session losses to more than 8%. Despite the recent weakness, the stock has recovered 67% from its June 22 low. However, it remains down 5.4% so far this year.
Why is the stock falling?
Investors remain focused on whether Salesforce can maintain growth as AI reshapes the software industry. Pricing, product adoption, execution and broader technology valuations are also weighing on sentiment.
AI remains one of the biggest questions surrounding Salesforce’s future growth. The company has been highlighting its efforts to incorporate AI into its platform while also trying to reassure investors that emerging AI tools will not undermine its existing software business.
During its annual conference, Salesforce also highlighted its partnership with AI startup Anthropic PBC. The collaboration has helped ease some investor concerns about Salesforce facing direct competition from the AI company.
The company’s recent global system outage during Dreamforce, however, provided another challenge. Customers experienced intermittent errors and access delays during the disruption. The incident occurred as Salesforce was showcasing its next-generation platform capabilities, putting additional attention on platform reliability and execution.
The broader market backdrop has also been unfavorable for high-growth technology stocks. Elevated US Treasury yields have contributed to lower valuation multiples across the sector. Higher discount rates reduce the present value assigned to projected future cash flows, putting pressure on software valuations even when companies continue to report solid operating performance.
Salesforce targets $63 billion revenue by FY30
Salesforce expects revenue to reach $63 billion in the fiscal year ending January 2030, Robin Washington, the company’s chief operating and financial officer, said during its annual conference on Wednesday.
The target is higher than the $61.4 billion average estimate among analysts, according to data compiled by Bloomberg. The outlook comes at an important point for Salesforce, as investors assess whether traditional enterprise software companies can defend their businesses while customers increasingly adopt artificial intelligence tools.
UBS raises target to $260, cuts FY28 growth estimate
UBS has increased its Salesforce price target to $260 from $240, while maintaining its Neutral rating, as per media reports.
As per reports, UBS sees potential for AIforce to increase usage of Salesforce’s platform. However, the brokerage believes the product’s pricing could restrict adoption in the near term. According to its assessment, the premium pricing attached to the upgrade could make it difficult for AIforce to gain significant traction quickly.
At the same time, UBS reduced its fiscal 2028 revenue growth estimate. The change reflects its expectation that reaching Salesforce’s $63 billion fiscal 2030 revenue target could take longer to build momentum, with a greater portion of the growth potentially coming later in the forecast period.
The UBS analyst wrote: “We spent two days at Salesforce’s big Dreamforce conference in SF, talking to customers about the new AIforce offering and to Salesforce management about how it will be monetized. We are Neutral-rated.”
Salesforce’s valuation also remains a point of discussion. The stock has a P/E ratio of 22.7 and a PEG ratio of 0.36, while InvestingPro’s analysis indicates that the shares appear undervalued based on its Fair Value calculations.
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