Salesforce (CRM) is back in focus after a flurry of AI-centered announcements, including the launch of Agentforce Operations and Merck Animal Health’s decision to deploy Agentforce Life Sciences across its global customer engagement.

Despite the flurry of AI product launches and partnerships, including Merck Animal Health adopting Agentforce Life Sciences, Salesforce’s recent price action tells a mixed story, with a 1-day share price return of 2.84% and year-to-date share price return of a 26.53% decline. The 1-year total shareholder return shows a 32.89% loss and the 5-year total shareholder return is down 10.75%, suggesting short term momentum is picking up while longer term performance remains under pressure.

If these AI updates have your attention and you want to see what else is moving, it could be worth scanning 31 AI small caps for other AI driven opportunities.

So with Salesforce trading at $186.34 and sitting at a roughly 46% discount to an intrinsic value estimate and about 44% below analyst targets, are you looking at an undervalued AI platform, or is the market already pricing in future growth?

Most Popular Narrative: 16.8% Undervalued

Compared with Salesforce’s last close at $186.34, the most followed narrative anchors on a fair value of $223.99, framing the stock as materially discounted.

I’m extending my projections to 2029, with a revenue estimate of $67.2B. I believe that the company’s improvement in performance will lead to a margin expansion and am upgrading my target net income margins from 17.5% to 20%, resulting in $13.4B in 2029.

Curious how a higher margin profile, steady growth assumptions, and a specific profit multiple come together to justify that fair value gap? The full narrative lays out the revenue path, profitability bridge, and valuation math that underpin this 16.8% undervaluation call.

Result: Fair Value of $223.99 (UNDERVALUED)

However, this story can change if larger enterprise customers slow adoption of Agentforce, or if acquisition spending and stock based compensation weigh more heavily on free cash flow.

Next Steps

If the mixed signals in this article leave you on the fence, now is a good time to review the details and form your own view. Start by weighing up the 4 key rewards.

Looking for more investment ideas?

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• Target quality at a discount by scanning 51 high quality undervalued stocks that combine strong fundamentals with prices that sit below their estimated worth.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.