Shares of Salesforce (CRM), the customer relationship management software provider, climbed 3.49% on Tuesday, October 13, outpacing a 0.65% advance in the broader Software & IT Services sector. The move followed Bank of America's reversal of its rating on the company, arriving as investors reassess whether artificial intelligence will displace or reinforce established enterprise platforms. The debate has centered on whether AI tools could ultimately replace the business software systems that manage records, workflows, and compliance for corporations.

Bank of America Reverses Its Rating

Bank of America analyst Tal Liani upgraded Salesforce from Underperform directly to Buy, bypassing the neutral middle rating on the firm's scale, on October 12 and raised his price target from $160 to $285, a roughly 78% increase. The revision cited input from corporate technology leaders, who indicated that customers intend to retain the systems that manage their records, workflows, and compliance requirements.

Liani had previously warned that AI tools could weaken demand for traditional software. His revised outlook instead sees AI agents operating within existing platforms rather than replacing them. He cautioned that slower adoption remains a risk, given that AI-related revenue is still relatively small.

Elsewhere, Microsoft's custom AI chip program illustrates how technology companies are pursuing distinct paths in AI. Microsoft plans deployments of its chips in 2027, while Salesforce is focused on software and automated workflows. Both strategies depend on sustained corporate spending.

AI Growth Supports the Stock

Salesforce's August results showed that Agentforce annual recurring revenue exceeded $1.5 billion, an increase of more than 240% year over year. Agentforce and Data 360 together approached $3.9 billion. These figures measure annualized contract revenue rather than quarterly sales.

The company reported $11.3 billion in second-quarter fiscal 2027 revenue, up 11% year over year. Current remaining performance obligations, a measure of contracted revenue expected to be recognized within the next twelve months, reached $33.5 billion, a 14% annual increase. Salesforce also agreed to acquire Loops, an AI analytics firm, in a move intended to expand its offerings.

Investors have also been scrutinizing the concentration of AI-linked market gains. An October 11 analysis found that 42 AI stocks accounted for 67% of S&P 500 price gains since January 2024. The findings have drawn attention to revenue expectations across technology companies.

Technology Peers Face Spending Questions

Tuesday's advance came alongside gains among other technology companies. Meta rose 2.56%, Microsoft added 1.25%, and Alphabet Class A shares advanced 0.16%, reflecting varied trading conditions across the sector.

In related developments, Meta's upcoming earnings report on October 21 will offer another look at corporate AI spending. The company previously guided for third-quarter revenue between $61 billion and $64 billion. Software businesses across the industry face similar questions about balancing growth investments with costs.

For Salesforce, the next test concerns whether growing Agentforce adoption can sustain higher subscription revenue. The company forecasts full-year fiscal 2027 revenue between $46.1 billion and $46.4 billion.