Freedom Broker: Salesforce Shares Have ~30% Upside Potential amid Recurring Revenue Growth above $1 Billion

Salesforce (CRM) reported Q1 2027 financial results above market expectations. Freedom Broker analysts note that annual recurring revenue (ARR) of the AI platform Agentforce has exceeded $1 billion, confirming strong demand for the company’s new products and supporting a Buy recommendation, despite lowering the target share price to $230.

Salesforce is one of the world’s largest enterprise software developers. It provides cloud‑based solutions for sales, customer service, marketing, and data analytics.

For the quarter, Salesforce’s revenue grew 13% YoY to $11.13 billion, exceeding market expectations. Adjusted earnings per share (EPS) also came in higher at $2.78, versus the expected $2.66. However, analysts point out that a significant portion of profit growth is tied to share buybacks and investment income, while core business momentum remains more subdued.

The strongest part of the report was AI business growth. Annual recurring revenue of the Agentforce platform reached $1.2 billion, more than tripling year‑over‑year. The company also recorded a sharp rise in adoption of AI tools and data processing services, confirming high customer interest in new products.

Freedom Broker analysts believe Salesforce continues to successfully advance its AI integration strategy. However, traditional business lines, including marketing and commercial services, are growing much slower, and the revenue forecast for the next quarter fell short of investor expectations.

A further support factor for the stock is the company’s large‑scale capital return programme. In Q1, Salesforce allocated approximately $27.5 billion to share buybacks and dividend payments.

Freedom Broker believes that after a significant share price decline since the beginning of the year, the downside potential looks limited. Key growth drivers include further monetisation of AI services, acceleration of organic business growth in H2, and development of new AI‑powered products.

Not an individual investment recommendation.