Piper Sandler has revised its price target for Salesforce (CRM, Financial), lowering it from $400 to $315. Despite the reduction, the firm maintains an Overweight rating on the company's shares. This adjustment reflects ongoing difficulties in the cloud applications and analytics sector, which are facing growth challenges due to factors such as tariffs, policy changes, and hurdles in artificial intelligence adoption.
The sector has been struggling with diminishing investor confidence, marking the fourth consecutive year of slowed industry growth. The complications surrounding AI integration suggest that its initial appeal may be waning, according to the analyst. Moreover, valuation multiples for these software companies have plummeted to their lowest point in seven years. While tariffs have only a minimal direct effect on software models, they contribute to the broader climate of uncertainty that is impacting the sector's outlook.
