Salesforce vs. ServiceNow: Which Cloud Software Stock Has the Edge?

Salesforce CRM and ServiceNow NOW are two of the most important enterprise cloud software companies, helping large organizations modernize operations, automate workflows and manage critical business processes.

While both benefit from long-term digital transformation trends, their business momentum and execution profiles differ meaningfully. For investors trying to choose between these two software leaders, a closer look at their fundamentals, growth outlook and risks helps determine which stock currently offers a stronger investment case.

The Case for Salesforce Stock

Salesforce has long held the top position in the customer relationship management market, according to Gartner. The company’s vision now goes beyond customer management, and it is building a broader ecosystem focused on artificial intelligence (AI), data and collaboration. Acquisitions like Waii, Bluebirds, Informatica and Slack show Salesforce’s push to evolve into a more complete enterprise platform.

AI is now central to Salesforce’s growth story. Since the 2023 rollout of Einstein GPT, Salesforce has been embedding generative AI across its offerings to help companies automate processes, improve decision-making and strengthen customer relationships.

Its latest innovation, Agentforce, is gaining momentum. Combined with Data Cloud, these AI-driven offerings brought in $1.4 billion in recurring revenues in the third quarter of fiscal 2026, representing a 114% year-over-year increase. Agentforce alone generated $540 million in recurring revenues, up 330% year over year. More than 50% of Agentforce deals came from existing clients, showing Salesforce’s success in cross-selling AI features to its user base.

Nonetheless, Salesforce’s biggest challenge right now is slowing sales growth. For years, it has delivered strong double-digit revenue increases. However, that pace has now cooled to single digits. In the first nine months of fiscal 2026, revenues rose just 8.7% year over year. This slowdown reflects cautious enterprise spending amid economic uncertainty and geopolitical pressures.

This changing growth profile shows how businesses are adjusting their IT budgets. Instead of large digital transformation projects, many are opting for smaller, lower-risk investments. For Salesforce, this means it has to adapt its strategy to stay competitive and relevant.

The Case for ServiceNow Stock

ServiceNow has been benefiting from the rising adoption of its workflows as enterprises scale digital operations. The platform supports automation across IT, HR, finance, procurement, legal and support, helping customers drive efficiency and reduce time to value.

Momentum in large deals continues to remain strong. In the third quarter of 2025, ServiceNow closed 103 transactions with more than $1 million in net new annual contract value (ACV), including six deals of more than $10 million. The number of customers contributing more than $5 million in ACV reached 553 at the end of the third quarter.

ServiceNow's AI strategy stands out for its comprehensive approach to enterprise adoption. At Knowledge 2025, the company introduced an AI Control Tower offering a unified dashboard for business leaders to monitor AI agents running across enterprise systems, track adoption metrics and ensure governance compliance. The company's AI Agent Fabric enables first and third-party agents to communicate and collaborate, creating a powerful orchestration layer that competitors struggle to match.

Strategic partnerships amplify ServiceNow's competitive advantages. The company expanded its strategic partnership with NTT DATA and designated them as a strategic AI delivery partner to accelerate AI-led transformation for enterprises globally. These partnerships, combined with collaborations with NVIDIA on open-source AI models and integrations with major cloud providers, expand ServiceNow's addressable market while reducing implementation friction for customers.

The company's federal business grew more than 30% year over year in the third quarter of 2025, demonstrating strength in a traditionally challenging market segment that many software companies struggle to penetrate effectively.

CRM vs. NOW: Which Stock Has the Stronger Growth Outlook?

Both companies will benefit from the ongoing digital transformation trend, but ServiceNow’s growth profile appears stronger in the near term. The Zacks Consensus Estimate for NOW’s 2025 revenues and earnings per share (EPS) indicates a year-over-year surge of 20.5% and 24.5%, respectively. For 2026, the top and bottom lines are projected to grow 18.1% and 16.8%, respectively.

ServiceNow Growth Estimates

By contrast, Salesforce’s fiscal 2026 estimates point to 9.5% revenue growth and a 14.6% EPS increase. For fiscal 2027, the top and bottom lines are projected to rise 10.8% and 10.5%, respectively.

Salesforce Growth Estimates

CRM vs. NOW: Price Performance & Valuation Check

Shares of Salesforce and ServiceNow have fallen 2.4% and 25.2%, respectively, over the past six months.

On the valuation front, Salesforce trades at a forward 12-month price-to-sales (P/S) multiple of 5.48, way below ServiceNow’s 10.23.

Conclusion: ServiceNow Has the Edge

Salesforce is a stable and profitable company with a strong platform, but its growth has slowed. Meanwhile, ServiceNow continues to deliver stronger growth, better execution and clearer demand trends. Despite the higher valuation, ServiceNow has an edge over Salesforce as an investment right now.

Currently, ServiceNow and Salesforce each carry 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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