Salesforce, Inc. (NYSE:CRM) stock is falling on Tuesday after Morgan Stanley downgraded the company from Overweight to Equal-Weight and lowered its price forecast to $185.
"Agentforce KPIs are inflecting, but AI momentum has yet to bend the cRPO/organic revenue growth curve as legacy assets (namely Commerce, Tableau) continue to drag," Morgan Stanley writes.
The analyst also said that Salesforce is making the right “agentic pivot" towards headless software, but monetization is still nascent, and the push to growth is likely to take longer expected.
The downgrade follows earlier rating actions from Wall Street research firms. On July 20, CLSA initiated coverage on Salesforce with a Hold rating and a $165 price forecast.
On July 14, Evercore ISI Group maintained an Outperform rating but lowered the price forecast from $260 to $250. That adjustment followed Keybanc downgrading the stock to Sector Weight the prior week.
Preliminary IBM Earnings Pressure Sector
Sector weakness intensified on July 14 when Salesforce stock fell in sympathy with International Business Machines Corp (NYSE:IBM). IBM reported preliminary second-quarter revenue of $17.2 billion, missing the $17.86 billion consensus estimate, and adjusted EPS of $2.93 against a $3.02 estimate.
IBM CEO Arvind Krishna called the results "disappointing" in a letter to investors, citing a shortfall in IBM’s Z mainframe business and software stack. Clients shifted capital expenditure toward servers, storage and memory purchases in late June to secure supply ahead of expected price increases.
Technical Analysis
CRM is trying to stabilize, but the longer-term trend is still pointed down: the stock is trading about 17.5% below its 200-day SMA ($207.80) and about 4.2% below its 100-day SMA ($178.89). It’s also stuck in a choppy "in-between" zone—about 4.5% above the 20-day SMA ($164.04) but only about 0.2% above the 50-day SMA ($171.15), with the 20-day still below the 50-day (a bearish short-term alignment).
RSI at 53.50 is neutral, which tells traders the move isn’t stretched enough to force a mean-reversion bounce or a momentum breakdown on its own. The more important tell is structure: the 50-day remains below the 200-day, keeping the longer-term bias bearish unless price can reclaim higher moving averages and hold them.
- Key Resistance: $187.50 — a nearby ceiling that lines up with a prior pivot zone above current price, where rebounds can stall before the 100-day area
- Key Support: $171 — a nearby line in the sand sitting right around the 50-day moving average zone, where buyers have recently shown up
CRM Price Action: Salesforce shares were down 2.14% at $170.07 at the time of publication on Tuesday, according to Benzinga Pro data.
Photo: NYCStock / Shutterstock.com
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