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CRM's AI and Data Cloud ARR Surges 120%: Can the Momentum Continue?
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Key Takeaways
CRM's AI and Data Cloud ARR hit $1.2B in Q2 fiscal 2026, up 120% year over year.
Data Cloud reached $7B, with 140% customer growth and 326% surge in data usage.
Agentforce signed 6,000 paid deals, with 60% moving from pilot projects to full production.
Salesforce, Inc. (CRM - Free Report) posted strong results in its AI and Data Cloud businesses. In the second quarter of fiscal 2026, the company's Annual Recurring Revenue (ARR) from AI and Data Cloud reached $1.2 billion, up 120% from last year. During the second-quarter earnings call, management noted that data and AI products are often sold together and are now becoming a core part of Salesforce’s growth plan.
Salesforce’s Data Cloud business is playing a key role, which is now a $7 billion business. Customers grew 140% year over year, and data usage rose 326% in the second quarter. More than half of the Fortune 500 companies already use Data Cloud. Additionally, the company is seeing customers expand usage as AI adoption accelerates. FedEx, for example, is using the data cloud platform to unify its data and reported double-digit gains in shipping contract conversions.
Agentforce, Salesforce’s AI agent platform, is also growing. The company has signed more than 6,000 paid deals. About 40% of bookings in the second quarter came from existing customers expanding their use. Moreover, management noted a 60% rise in customers moving from pilot projects to full production. Additionally, Salesforce’s newly introduced pricing model, called flex credits, which provides flexible payment options, is already making up about 80% of Agentforce bookings. This model has the potential to scale recurring revenues over time, aiding in Salesforce’s top-line growth.
Moreover, the combination of Data Cloud and Agentforce acts as the base of the Agentic Enterprise, where accurate data supports AI agents to deliver better outcomes. These factors can help Salesforce to keep up this strong growth and turn early adoption into steady, long-term gains. The Zacks Consensus Estimate for fiscal 2026 and 2027 revenues indicates a year-over-year increase of 8.8% and 9.1%, respectively.
How Competitors Fare Against CRM
Microsoft Corporation (MSFT - Free Report) and ServiceNow, Inc. (NOW - Free Report) are also pushing AI automation in the enterprise market.
Microsoft has integrated strong AI features into its Dynamics 365 platform through its Copilot tools, simplifying tasks, such as writing emails, creating reports and summarizing meetings for users. Since many companies already use Microsoft products, integrating Copilot into their existing workflows is simple and cost-effective.
ServiceNow’s Now Assist platform uses AI to automate IT service management, customer support and human resource management tasks. ServiceNow has been rolling out industry-specific AI tools, similar to what Salesforce is doing with Agentforce.
Salesforce’s Price Performance, Valuation and Estimates
Shares of Salesforce have plunged 25.4% year to date against the Zacks Computer – Software industry’s growth of 22%.
Salesforce YTD Price Return Performance
Image Source: Zacks Investment Research
From a valuation standpoint, CRM trades at a forward price-to-earnings ratio of 20.48, significantly below the industry’s average of 33.89.
Salesforce Forward 12-Month P/E Ratio
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 11.2% and 11.7%, respectively. Estimates for fiscal 2026 and 2027 have been revised upward in the past 30 days.
Image: Bigstock
CRM's AI and Data Cloud ARR Surges 120%: Can the Momentum Continue?
Key Takeaways
Salesforce, Inc. (CRM - Free Report) posted strong results in its AI and Data Cloud businesses. In the second quarter of fiscal 2026, the company's Annual Recurring Revenue (ARR) from AI and Data Cloud reached $1.2 billion, up 120% from last year. During the second-quarter earnings call, management noted that data and AI products are often sold together and are now becoming a core part of Salesforce’s growth plan.
Salesforce’s Data Cloud business is playing a key role, which is now a $7 billion business. Customers grew 140% year over year, and data usage rose 326% in the second quarter. More than half of the Fortune 500 companies already use Data Cloud. Additionally, the company is seeing customers expand usage as AI adoption accelerates. FedEx, for example, is using the data cloud platform to unify its data and reported double-digit gains in shipping contract conversions.
Agentforce, Salesforce’s AI agent platform, is also growing. The company has signed more than 6,000 paid deals. About 40% of bookings in the second quarter came from existing customers expanding their use. Moreover, management noted a 60% rise in customers moving from pilot projects to full production. Additionally, Salesforce’s newly introduced pricing model, called flex credits, which provides flexible payment options, is already making up about 80% of Agentforce bookings. This model has the potential to scale recurring revenues over time, aiding in Salesforce’s top-line growth.
Moreover, the combination of Data Cloud and Agentforce acts as the base of the Agentic Enterprise, where accurate data supports AI agents to deliver better outcomes. These factors can help Salesforce to keep up this strong growth and turn early adoption into steady, long-term gains. The Zacks Consensus Estimate for fiscal 2026 and 2027 revenues indicates a year-over-year increase of 8.8% and 9.1%, respectively.
How Competitors Fare Against CRM
Microsoft Corporation (MSFT - Free Report) and ServiceNow, Inc. (NOW - Free Report) are also pushing AI automation in the enterprise market.
Microsoft has integrated strong AI features into its Dynamics 365 platform through its Copilot tools, simplifying tasks, such as writing emails, creating reports and summarizing meetings for users. Since many companies already use Microsoft products, integrating Copilot into their existing workflows is simple and cost-effective.
ServiceNow’s Now Assist platform uses AI to automate IT service management, customer support and human resource management tasks. ServiceNow has been rolling out industry-specific AI tools, similar to what Salesforce is doing with Agentforce.
Salesforce’s Price Performance, Valuation and Estimates
Shares of Salesforce have plunged 25.4% year to date against the Zacks Computer – Software industry’s growth of 22%.
Salesforce YTD Price Return Performance
Image Source: Zacks Investment Research
From a valuation standpoint, CRM trades at a forward price-to-earnings ratio of 20.48, significantly below the industry’s average of 33.89.
Salesforce Forward 12-Month P/E Ratio
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 11.2% and 11.7%, respectively. Estimates for fiscal 2026 and 2027 have been revised upward in the past 30 days.
Image Source: Zacks Investment Research
Salesforce currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.