Salesforce Pushes Data Cloud Adoption: Will It Anchor Growth?
Salesforce is witnessing a strong adoption trend for its Data Cloud platform. In the first quarter, nearly 60% of the company's top 100 deals included both Data Cloud and artificial intelligence (AI) capabilities, reflecting how valuable they can be if paired together. Additionally, roughly half of the new Data Cloud bookings in the last reported quarter came from existing clients, suggesting strong satisfaction and room for further growth.
Salesforce is also integrating the Data Cloud platform with its other tools like Agentforce, Tableau and Slack. These connections make it easier for enterprises to activate their data and apply AI across operations. This integration could drive higher contract values and deeper customer relationships for Salesforce.
To stay ahead in the competition across the enterprise software space, Salesforce will need to continuously upgrade its products and ensure quick, cost-effective deployment for clients. If the company can continue this momentum, Data Cloud could serve as a major revenue driver and strengthen Salesforce's position in AI-powered enterprise solutions.
We believe that the Data Cloud platform has the potential to anchor Salesforce's revenues, which are currently witnessing a decelerating growth trend. After years of consistent double-digit revenue increases, the momentum has faded. In the first quarter, total revenues rose just 7.7% year over year. The Zacks Consensus Estimate depicts that this trend will persist, with mid-to-high single-digit growth expected for fiscal 2026 and 2027.
How Rivals Stack Up Against Salesforce's Data Cloud Service
Salesforce faces intensified competition from Microsoft Corporation MSFT and Snowflake Inc. SNOW in the data cloud space.
Microsoft offers data services through its Azure Data platform. The company has already integrated the platform with its other productivity tools, including Power Platform, Dynamics 365 and Copilot AI, to enhance user experience and attract new clients. Many companies already use Microsoft's cloud and productivity software, making it easy to add its data services.
Snowflake is another major competitor, known for its powerful cloud-based data warehouse. Unlike Salesforce, Snowflake focuses only on data, allowing companies to store, process and share large volumes easily. It also supports multiple clouds and has strong analytics tools.
Salesforce's Price Performance, Valuation and Estimates
Shares of Salesforce have plunged 29.1% year to date against the Zacks Computer – Software industry's growth of 20.8%.
Image Source: Zacks Investment Research
From a valuation standpoint, CRM trades at a forward price-to-earnings ratio of 19.77, significantly below the industry's average of 35.58.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Salesforce's fiscal 2026 and 2027 earnings implies a year-over-year increase of approximately 10.8% and 11.5%, respectively. Estimates for fiscal 2026 and fiscal 2027 have been revised upward in the past 60 days.
Image Source: Zacks Investment Research
Salesforce currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
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