Can Salesforce's Data Cloud Business Offset Slowing Growth Trends?

Salesforce, Inc. CRM has been encountering a slowing growth trend over the past several quarters. For years, the company delivered double-digit revenue increases. However, that pace has slowed to single digits over the past year, raising questions about what can drive the momentum back on track. Looking at the last quarter’s financial performance, we consider that its rapidly growing Data Cloud business could play a key role in bringing the overall top-line growth in the double-digit range.

Salesforce’s Data Cloud platform brings together customer data from multiple sources and makes it usable across its other products. In the second quarter of fiscal 2026, the company stated that customer adoption for its Data Cloud platform surged 140% year over year. More than half of the Fortune 500 companies are now using the Data Cloud platform. This signifies strong demand from enterprises looking to unify their data and apply artificial intelligence (AI) 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 the 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 Competitors in the Data Cloud Service Space

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 23.8% year to date against the Zacks Computer – Software industry’s growth of 21.2%.

From a valuation standpoint, CRM trades at a forward price-to-earnings ratio of 20.72, significantly below the industry’s average of 33.24.

The Zacks Consensus Estimate for Salesforce’s fiscal 2026 and 2027 earnings implies a year-over-year increase of approximately 11.4% and 11.3%, respectively. Estimates for fiscal 2026 have been revised upward in the past 60 days, while forecasts for fiscal 2027 have been lowered over the past 30 days.

Salesforce currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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