Salesforce shares experienced significant gains following Bank of America's double-upgrade announcement, rising 3% from the previous close. According to latest reports, the stock was trading at $234.26, representing a 2.25% increase at 11:29 am GMT-4 on October 12. Bank of America upgraded the software company from Underperform to Buy, while simultaneously raising the price target to $285 from $160. The revised target implies an upside potential of approximately 24.2% from Salesforce's previous closing price. The upgrade reflects Bank of America's view that the AI threat that spooked investors was overblown, with the bank arguing that large enterprises are unlikely to replace platforms housing their business logic, data, workflows and compliance frameworks. As per Barron's, the headline summed up the analyst sentiment: 'The AI Overhang Is Over, Say Analysts.'
Salesforce delivered robust Q2 results that reinforced Bank of America's bullish outlook on the company's AI strategy. The company reported Q2 revenue of $11.35 billion, up 11%, with Agentforce ARR hitting $1.5 billion. Most notably, free cash flow surged 81% to $1.1 billion, demonstrating strong operational efficiency. Management raised the company's full-year revenue guidance by approximately $300 million, while noting that net new AOV growth was the strongest in four years and attrition was near its lowest level ever. These results provide concrete evidence that Salesforce's AI integration is driving real business value and growth, with the company's Q2 FY27 results showing Agentforce ARR exceeded $1.5 billion, up over 240% year over year, and current remaining performance obligations reached $33.5 billion. CEO Marc Benioff stated at the time: 'We just delivered one of our best quarters ever, outperforming across every key metric.'
The upgrade has drawn significant attention to Salesforce's valuation relative to peers. At 14x forward earnings, Salesforce stock trades well below ServiceNow at 28x and Palantir at 85x. Beyond Salesforce, ServiceNow offers enterprise workflow software and Palantir sells data and decision platforms, so all three companies are positioned to benefit from enterprise AI adoption. Palantir's Q2 2026 revenue rose 92.8% year over year to $1.94 billion, with the company raising its FY2026 sales outlook to $8.15 billion to $8.16 billion. The software segment and Salesforce stock in particular are drawing buyers even as large-cap technology goes practically nowhere, with the iShares Expanded Tech-Software Sector ETF up 0.6% while the Invesco QQQ Trust is down 0.2%. Palantir's 93% revenue growth justifies most of the valuation gap with Salesforce, as per the latest market data.
