Salesforce vs. Adobe: Which Cloud Software Stock Has an Edge?

Salesforce, Inc. CRM and Adobe Inc. ADBE are two well-established leaders in the cloud software space. Both companies help businesses improve customer engagement, boost productivity and support digital transformation. Adobe is better known for its tools for creatives and marketers, while Salesforce leads in customer relationship management. Recently, both firms have been betting big on artificial intelligence (AI) to drive future growth. This raises an important question for investors: Which of the two stocks has a better upside potential?To answer that, let’s examine their latest results, business strategies, valuation levels and risks.The Case for SalesforceSalesforce continues to dominate the customer relationship management market, outpacing rivals like Microsoft, Oracle and SAP. According to Gartner, it still holds the largest share in this segment.Over the years, Salesforce has built a strong and interconnected platform. The acquisition of Informatica, Zoomin, and Own Company shows its intent to move beyond its position as a customer relationship management software maker and become a broader enterprise software provider focused on AI, data and collaboration.AI is now central to Salesforce’s growth plan. Since rolling out Einstein GPT in 2023, the company has embedded generative AI into its platform to help businesses automate processes, improve decisions and offer better customer experiences. As AI adoption rises across industries, Salesforce is well-placed to benefit from the same.Its latest innovation, Agentforce, reflects that momentum. Paired with its Data Cloud, Agentforce has already hit $100 million in annualized revenues just two quarters after launch. Over 4,000 customers are using it for various tasks in sales, service and marketing. Data Cloud is also expanding fast, with ARR growing over 120% year over year. Salesforce’s broader strategy to bring apps, data and AI agents under one umbrella gives it a strong edge.However, revenue growth has slowed. In the first quarter of fiscal 2026, Salesforce’s revenues increased 8% year over year, well below the double-digit pace in the previous years. This isn’t due to company issues, but cautious enterprise spending amid an uncertain macroeconomic environment and rising tariffs. Still, adjusted EPS rose 6%, and Salesforce remained profitable and operationally sound.The Case for AdobeAdobe had a solid first-quarter fiscal 2025, with revenues rising 10% to $5.71 billion and non-GAAP EPS growing 13.4% to $5.08. It continues to generate strong margins with an operating margin of 47.5% in the first quarter and delivered a record $2.48 billion in operating cash flow.Adobe remains the leader in creative software, with a loyal customer base and a broad range of products. AI is also a growth driver here. Adobe’s AI-related business added more than $125 million in ARR last quarter and is expected to double by the end of the year.The company is expanding its AI lineup through tools like GenStudio and Firefly Services, designed to help marketers and agencies create campaigns more efficiently. It recently introduced new Firefly-powered tools in Premiere Pro and After Effects, including video expansion and 3D motion design features. Adobe is also upgrading tools like Frame.io and enhancing Acrobat, Reader, and Express with AI assistants.Adobe plans to monetize Firefly through tiered pricing inside Creative Cloud. It is also increasing sales efforts to target businesses, schools and government clients. These developments suggest that Adobe is serious about scaling its AI-driven business.Nonetheless, Adobe’s second-quarter guidance raises some red flags. It expects non-GAAP EPS between $4.95 and $5.00, down from the first quarter despite projecting higher sequential revenues. This signals margin pressure, likely from higher research & development spending, expanding cloud infrastructure for AI, and updates to product bundles and sales strategy.How Do Earnings Estimates Compare for CRM & ADBE?Wall Street analysts seem more confident about Salesforce’s earnings stability. Over the past 60 days, the Zacks Consensus Estimate for Salesforce’s next two quarters' earnings has remained unchanged.CRM EPS Estimate TrendImage Source: Zacks Investment ResearchOn the other hand, Adobe’s earnings estimates for the same period have been lowered. This suggests some concerns about near-term profitability.ADBE EPS Estimate TrendImage Source: Zacks Investment ResearchIn the long run, Salesforce’s earnings are expected to witness a CAGR of 12.7%, slightly better than Adobe’s 12.4%. While the gap is minor, it supports the idea that Salesforce has a better profitability outlook.CRM vs. ADBE: Price Performance and ValuationSalesforce stock has performed much better over the past year, gaining 26.7%, while Adobe shares have lost 7.5%. This performance gap reflects stronger investor confidence in Salesforce’s growth story.Image Source: Zacks Investment ResearchFrom a valuation perspective, Salesforce also appears cheaper. It trades at 6.32 times forward sales, while Adobe trades at a higher 7.17 times. This suggests Salesforce has more room for upside, assuming its fundamentals hold steady.Image Source: Zacks Investment ResearchFinal Thoughts: CRM Has an Edge Over ADBESalesforce and Adobe are both strong players in cloud software, but Salesforce looks like the better option right now. Its focus on AI, unified platform strategy, and more favorable earnings outlook give it a clear advantage.Adobe is growing and profitable, but rising costs and higher valuation may limit short-term gains. Meanwhile, Salesforce is showing faster progress in building enterprise-scale AI capabilities.Currently, Salesforce holds a Zacks Rank #3 (Hold), which also puts it ahead of Adobe’s Zacks Rank #4 (Sell).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 among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.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 Salesforce Inc. (CRM): Free Stock Analysis Report Adobe Inc. (ADBE): 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