Salesforce (CRM) has been disrupting its business to be in a better position for the agentic era, but solid Agentforce key performance indicators, or KPIs, have not yet driven an inflection in organic growth as its legacy portfolio drags continue, Morgan Stanley said in a note Tuesday.

The investment firm said Salesforce shares will likely stay range-bound amid the absence of a significant growth inflection.

The company's recent results indicated its AI momentum has been offset by a "deterioration and/or lack of upside to subscription revenue growth and visible forward-looking metrics," Morgan Stanley said.

The investment firm said, however, that Salesforce is "one of the few scaled SaaS incumbents that appears to be actively trying to disrupt itself -- rather than defending only the legacy seat-based UI, management is decoupling the data, workflow, and action layers from its traditional application interface."

The investment firm said that's likely the "correct move" because in an agentic world, the company will need to make its customer data, context, permissions, and workflow layer the monetizable surface.

Morgan Stanley downgraded Salesforce to equal-weight from overweight and cut the company's price target to $185 from $287.

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