Salesforce Bets on Data Cloud: Will This Offset Slowing Growth Trends?

Salesforce, Inc. CRM has been witnessing a slowing revenue growth trend over the past several quarters. After years of steady double-digit revenue increases, growth has cooled to single digits over the past year, raising questions about what can bring the momentum back on track. To return to its high-growth trajectory, the company is focusing on enhancing its artificial intelligence (AI) capabilities and data cloud business.Data Cloud is now central to Salesforce’s strategy. The platform pulls customer data from many systems and makes it usable across Salesforce products. In the second quarter of fiscal 2026, the company reported a 140% year-over-year surge in Data Cloud customer adoption. More than half of the Fortune 500 are already on the platform, which clearly signals strong demand from large enterprises trying to unify data and use AI more effectively.Salesforce is also integrating the Data Cloud platform with its other tools like Agentforce, Tableau and Slack. These integrations are helping enterprises easily analyze their data and apply AI across operations. This could drive higher-value contracts for Salesforce, aiding top-line growth.Salesforce estimates that its data-related business is already generating around $7 billion annually. With a consumption-based pricing model, we believe that the revenue growth potential for the Data Cloud platform is significant.However, we will have to wait and watch for a few quarters to witness the impact of the rapidly growing adoption of the Data Cloud platform on Salesforce’s overall revenue growth. For now, the Zacks Consensus Estimate for fiscal 2026 and 2027 revenues indicates year-over-year growth in the high single-digit range.Salesforce’s Rivals in the Data Cloud Service SpaceSalesforce 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 EstimatesShares of Salesforce have plunged 31.8% year to date against the Zacks Computer – Software industry’s growth of 10.6%.Salesforce YTD Price Return PerformanceImage Source: Zacks Investment ResearchFrom a valuation standpoint, CRM trades at a forward price-to-earnings ratio of 18.4, significantly below the industry’s average of 29.52.Salesforce Forward 12-Month P/E RatioImage Source: Zacks Investment ResearchThe Zacks Consensus Estimate for Salesforce’s fiscal 2026 and 2027 earnings implies a year-over-year increase of approximately 11.4% and 11.2%, respectively. Estimates for fiscal 2026 have been revised upward in the past seven days, while forecasts for fiscal 2027 have been lowered over the same time frame.Image Source: Zacks Investment ResearchSalesforce currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Microsoft Corporation (MSFT): Free Stock Analysis Report Salesforce Inc. (CRM): Free Stock Analysis Report Snowflake Inc. (SNOW): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks