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Salesforce Bets Big on Informatica: Can It Be CRM's Next Growth Leg?
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Key Takeaways
Salesforce sees Informatica strengthening its enterprise AI and data management position.
Salesforce's AI and data ARR, including Agentforce, Data 360 and Informatica Cloud, jumped 200% to $3.4B.
CRM raised the low end of fiscal 2027 revenue guidance after strong first-quarter momentum.
Salesforce, Inc. (CRM - Free Report) is betting that the integration of Informatica will strengthen its position in enterprise AI and data management. The enterprise software maker acquired Informatica last year for $8 billion. As companies increasingly rely on trusted data to power AI applications, Informatica's capabilities could become a key growth catalyst for Salesforce in fiscal 2027 and beyond.
Informatica enhances Salesforce's Data 360 platform by adding advanced data integration, governance, quality and metadata management capabilities. These tools help businesses organize information from multiple sources, making AI agents more accurate and reliable. By combining Informatica with Agentforce and Data 360, Salesforce aims to offer customers a complete platform for building AI-powered business workflows.
The strategy is already showing encouraging signs. During the first quarter of fiscal 2027, Salesforce reported that combined AI and data annual recurring revenues (ARR), including Agentforce, Data 360 and Informatica Cloud, reached $3.4 billion. This reflects a whopping 200% year-over-year surge. Management also noted that Informatica's business contributed to first-quarter revenue outperformance and that revenue synergies have started to emerge following the acquisition.
Salesforce delivered strong financial results in the first quarter. Revenues increased 13% year over year to $11.13 billion, while current remaining performance obligations (cRPO) rose about 14% to $33.6 billion. Encouraged by this momentum, the company raised the lower end of its fiscal 2027 revenue guidance to $45.9-$46.2 billion from $45.8-$46.2 billion projected earlier.
The integration also expands Salesforce's cross-selling opportunities by allowing existing CRM customers to adopt enterprise-grade data management solutions. As more businesses move AI projects into large-scale production, the combined platform could drive higher customer spending, improve retention and create a stronger foundation for long-term revenue growth. The Zacks Consensus Estimate for fiscal 2027 revenues is currently pegged at $46.09 billion, indicating a year-over-year increase of approximately 11%.
CRM Faces Intense AI Competition From Microsoft and Oracle
Salesforce is no longer competing only in the traditional customer relationship market. As enterprises accelerate spending on AI-powered software, Microsoft Corporation (MSFT - Free Report) and Oracle Corporation (ORCL - Free Report) are emerging as two of its biggest rivals. Both companies are using their large enterprise customer bases, cloud platforms and expanding AI portfolios to win a greater share of enterprise AI budgets.
Microsoft remains one of Salesforce's strongest competitors, thanks to its broad ecosystem spanning Azure, Microsoft 365 and Dynamics 365. The company is rapidly embedding AI copilots across its productivity and business applications, enabling customers to automate sales, customer service and business workflows. This integrated approach gives Microsoft a meaningful advantage, as enterprises can adopt AI within the software they already use.
The momentum is evident in its financial performance. In the third quarter of fiscal 2026, Azure and other cloud services revenues grew 40% year over year, while Microsoft's AI business surpassed a $37 billion annual revenue run rate, soaring 123% from the prior year. With its vast installed base and deep AI investments, Microsoft poses a significant competitive threat to Salesforce's Agentforce platform.
Oracle is also becoming a more formidable player in enterprise AI. The company is expanding AI capabilities across Oracle Cloud Infrastructure (“OCI”), Fusion ERP, customer experience and database offerings, enabling businesses to automate a wide range of enterprise processes. Strong demand for AI infrastructure is already translating into faster cloud growth.
In the fourth quarter of fiscal 2026, Oracle's total cloud revenues rose 47% year over year to $9.9 billion, while OCI revenues surged 93% to $5.8 billion. Combined with Oracle's long-standing relationships with large enterprises, this cloud momentum strengthens its ability to compete with Salesforce as organizations increasingly invest in AI-driven business applications.
Salesforce’s Price Performance, Valuation and Estimates
Shares of Salesforce have plunged 37.3% year to date, while the Zacks Internet – Software industry has fallen 11.1%.
Salesforce YTD Price Return Performance
Image Source: Zacks Investment Research
From a valuation standpoint, CRM trades at a forward price-to-earnings ratio of 11.26, significantly below the industry’s average of 26.32.
Salesforce Forward 12-Month P/E Ratio
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Salesforce’s fiscal 2027 and 2028 earnings implies a year-over-year increase of approximately 12.8% and 9.7%, respectively. Estimates for fiscal 2027 and 2028 have been revised upward over the past 30 days.
View the Zacks #1 Rank List
Image: Bigstock
Salesforce Bets Big on Informatica: Can It Be CRM's Next Growth Leg?
Key Takeaways
Salesforce, Inc. (CRM - Free Report) is betting that the integration of Informatica will strengthen its position in enterprise AI and data management. The enterprise software maker acquired Informatica last year for $8 billion. As companies increasingly rely on trusted data to power AI applications, Informatica's capabilities could become a key growth catalyst for Salesforce in fiscal 2027 and beyond.
Informatica enhances Salesforce's Data 360 platform by adding advanced data integration, governance, quality and metadata management capabilities. These tools help businesses organize information from multiple sources, making AI agents more accurate and reliable. By combining Informatica with Agentforce and Data 360, Salesforce aims to offer customers a complete platform for building AI-powered business workflows.
The strategy is already showing encouraging signs. During the first quarter of fiscal 2027, Salesforce reported that combined AI and data annual recurring revenues (ARR), including Agentforce, Data 360 and Informatica Cloud, reached $3.4 billion. This reflects a whopping 200% year-over-year surge. Management also noted that Informatica's business contributed to first-quarter revenue outperformance and that revenue synergies have started to emerge following the acquisition.
Salesforce delivered strong financial results in the first quarter. Revenues increased 13% year over year to $11.13 billion, while current remaining performance obligations (cRPO) rose about 14% to $33.6 billion. Encouraged by this momentum, the company raised the lower end of its fiscal 2027 revenue guidance to $45.9-$46.2 billion from $45.8-$46.2 billion projected earlier.
The integration also expands Salesforce's cross-selling opportunities by allowing existing CRM customers to adopt enterprise-grade data management solutions. As more businesses move AI projects into large-scale production, the combined platform could drive higher customer spending, improve retention and create a stronger foundation for long-term revenue growth. The Zacks Consensus Estimate for fiscal 2027 revenues is currently pegged at $46.09 billion, indicating a year-over-year increase of approximately 11%.
CRM Faces Intense AI Competition From Microsoft and Oracle
Salesforce is no longer competing only in the traditional customer relationship market. As enterprises accelerate spending on AI-powered software, Microsoft Corporation (MSFT - Free Report) and Oracle Corporation (ORCL - Free Report) are emerging as two of its biggest rivals. Both companies are using their large enterprise customer bases, cloud platforms and expanding AI portfolios to win a greater share of enterprise AI budgets.
Microsoft remains one of Salesforce's strongest competitors, thanks to its broad ecosystem spanning Azure, Microsoft 365 and Dynamics 365. The company is rapidly embedding AI copilots across its productivity and business applications, enabling customers to automate sales, customer service and business workflows. This integrated approach gives Microsoft a meaningful advantage, as enterprises can adopt AI within the software they already use.
The momentum is evident in its financial performance. In the third quarter of fiscal 2026, Azure and other cloud services revenues grew 40% year over year, while Microsoft's AI business surpassed a $37 billion annual revenue run rate, soaring 123% from the prior year. With its vast installed base and deep AI investments, Microsoft poses a significant competitive threat to Salesforce's Agentforce platform.
Oracle is also becoming a more formidable player in enterprise AI. The company is expanding AI capabilities across Oracle Cloud Infrastructure (“OCI”), Fusion ERP, customer experience and database offerings, enabling businesses to automate a wide range of enterprise processes. Strong demand for AI infrastructure is already translating into faster cloud growth.
In the fourth quarter of fiscal 2026, Oracle's total cloud revenues rose 47% year over year to $9.9 billion, while OCI revenues surged 93% to $5.8 billion. Combined with Oracle's long-standing relationships with large enterprises, this cloud momentum strengthens its ability to compete with Salesforce as organizations increasingly invest in AI-driven business applications.
Salesforce’s Price Performance, Valuation and Estimates
Shares of Salesforce have plunged 37.3% year to date, while the Zacks Internet – Software industry has fallen 11.1%.
Salesforce YTD Price Return Performance
Image Source: Zacks Investment Research
From a valuation standpoint, CRM trades at a forward price-to-earnings ratio of 11.26, significantly below the industry’s average of 26.32.
Salesforce Forward 12-Month P/E Ratio
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Salesforce’s fiscal 2027 and 2028 earnings implies a year-over-year increase of approximately 12.8% and 9.7%, respectively. Estimates for fiscal 2027 and 2028 have been revised upward over 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.