Salesforce's AI Moves Could Skyrocket Service Cloud Revenue

As the tech industry increasingly pivots towards artificial intelligence, Salesforce (NYSE:CRM) is positioning itself at the forefront of this shift with its AI-powered Service Cloud. This strategic move not only highlights the growing importance of AI in driving business growth but also reshapes investor perceptions of Salesforce’s long-term potential.

Bank of America Securities analyst Brad Sills maintained a Buy rating on Salesforce with a price target of $350 on Monday.

Salesforce is betting big on its largest business unit, Service Cloud, which analysts expect will generate $9.7 billion in fiscal 2026 revenue, making up 25% of total subscription revenue, Sills noted. In the first quarter of fiscal 2026, growth slowed slightly to 7%.

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Still, after adjusting for leap year effects and rounding, the analyst noted that the normalized rate stands closer to 8.5%, indicating only a modest deceleration.

He noted the slowdown has bottomed out and projects acceleration to 9% in the coming quarters, trending toward 12% in the long run.

Sills noted that Service Cloud's growth potential stands out across the industry, with projected incremental gains of 21%, significantly ahead of the next closest competitor at 7%. The analyst attributed this outperformance to Service Cloud's user-friendly interface, deep customization, seamless integration across sales and service, and, most notably, Agentforce, Salesforce's AI-powered service agent suite.

He said that add-ons such as Service Cloud Voice, Field Service, Customer Experience Intelligence, and Digital Engagement represent durable upsell opportunities that support this bullish outlook.

Sills noted that Salesforce's Agentforce AI suite is becoming a central growth lever. In recent partner conversations, the analyst stated that use cases such as case management, meeting preparation, shipment tracking, and analytics were repeatedly cited.

He expects Agentforce for Service Cloud to contribute $1.7 billion in revenue over the next five years, helping the platform achieve a compound annual growth rate (CAGR) of 9%, or 12% in an upside scenario. Sills noted that over 8,000 customers have already signed up for AI agents, with more than half of them converting to paying accounts.

The analyst noted that the Service Cloud platform provides agents with powerful tools, including AI-driven case routing, knowledge base searches, and self-service customer portals, making it a key enabler of customer satisfaction and lifetime value.

Salesforce offers pricing tiers ranging from the $25/month Starter Suite to the $550/month Agentforce 1 edition, which bundles AI credits and Data Cloud capacity for enterprise-scale deployments. According to the analyst, this flexible pricing model facilitates broad adoption across businesses of all sizes.

Crucially, Salesforce's go-to-market strategy integrates Agentforce into its existing customer base—60% of which already uses Sales or Service Cloud—allowing for easy cross-sell and bundled offerings, Sills noted. He said that by publicizing case studies from OpenTable, PepsiCo, and other enterprise users, Salesforce aims to demonstrate real-world benefits and drive deeper adoption of Agentforce.

The analyst noted that Salesforce is well-positioned to reaccelerate top-line growth with its AI-first vision, full-stack capabilities, and established customer base. He added that Service Cloud's continued evolution, primarily through Agentforce, may very well be the company's ticket to sustained leadership in enterprise software through the end of the decade.

Sills projected fiscal 2026 sales of $41.2 billion and EPS of $11.28.

CRM Price Action: Salesforce shares were up 1.07% at $260.83 at the time of publication Monday, according to Benzinga Pro.

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