"It's possible we're downgrading Salesforce at exactly the wrong time," KeyBanc analysts wrote as they bumped the software stock anyway.

It's the conundrum facing Salesforce and software investors right now. Salesforce has fallen 37% this year and the iShares Expanded Tech-Software Sector ETF is down 13% amid fears about the disruption caused by artificial intelligence.

More than 70% of analysts covering Salesforce stock think it's a Buy, with an average price target of $241.08, implying a 45% jump from Wednesday's closing price of $166.58.

But what if everyone is waiting for a rebound that's never going to come?

KeyBanc's Jackson Ader acknowledged that downgrading the stock to Sector Weight from Overweight late Wednesday may end up being poor timing. "But at some point, we have to ask ourselves, why gather the evidence if we're not going to use it," he added.

The firm's checks and conversations with customers have "not been strong, " and neither has the feedback on Agentforce--the company's AI agent offering.

"What we can piece together in the disclosed numbers does not signal building momentum," Ader said, lowering estimates, downgrading the stock to Sector Weight from Overweight, and removing his price target altogether.

It's another blow for the stock, which was down 3.8% in premarket trading Thursday.

Barron's dropped its own Buy recommendation on the stock last month. The company hasn't done enough to dispel the market's concern that its days of high growth are behind it, Barron's argued.

Write to Callum Keown at callum.keown@dowjones.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

July 09, 2026 07:42 ET (11:42 GMT)

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