We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Salesforce, Inc. (CRM - Free Report) and Twilio Inc. (TWLO - Free Report) are taking different routes to capture the growing demand for artificial intelligence (AI)-powered customer engagement. Salesforce is expanding beyond traditional customer relationship management with Customer 360, Data 360, Slack and Agentforce. Twilio, meanwhile, is building the communications infrastructure that connects businesses, customers and increasingly AI agents.
Their latest quarterly results show solid execution, but their growth rates, valuations and risk profiles differ. A closer look across fundamentals, growth, valuation and market challenges can help determine which stock has an edge over the other from an investment point of view.
Salesforce: Strong AI Story, But Growth Needs to Accelerate
Salesforce has been the global customer relationship management (CRM - Free Report) software leader for years, according to Gartner. However, its ambitions now extend well beyond CRM. The company is building a broader enterprise platform that brings together customer data, collaboration, applications and AI.
Its acquisition strategy supports this shift. Slack strengthened Salesforce's collaboration capabilities, while Informatica added data management capabilities. Smaller AI-focused acquisitions, including Doti AI and Spindle AI, further support its push into artificial intelligence.
The bigger question is whether Salesforce can turn its huge customer base into a faster-growing AI business. So far, the early signs are encouraging. Agentforce annual recurring revenues (ARR) surpassed $1.5 billion in the second quarter of fiscal 2027, jumping more than 240% year over year. Combined AI and Data ARR, including Agentforce, Data 360 and Informatica Cloud, increased 210% to $3.9 billion. These metrics signify that AI is moving from being a product feature to becoming a potential growth engine for Salesforce.
The major concern is that the company's overall growth remains much slower than its AI metrics. Its second-quarter fiscal 2027 revenues increased 11% to $11.3 billion. For a company of Salesforce's size, double-digit growth is still solid, but investors need stronger evidence that AI can lift the company's broader revenue trajectory.
The reported 102.7% increase in non-GAAP earnings per share (EPS) to $5.90 also needs context. The quarter benefited from a significant gain on strategic investments, including Salesforce's investment in Anthropic. EPS growth should not be viewed as purely reflective of underlying operating growth.
Salesforce, Inc. Price, Consensus and EPS Surprise
Twilio enters the AI race from a different position. It provides communications and customer engagement infrastructure that businesses can use across voice, messaging and other channels. Its business model is showing stronger near-term growth. Second-quarter 2026 revenues increased 22% to $1.50 billion, while organic revenues grew 17%. Non-GAAP EPS surged 23.5% to $1.47.
Twilio is trying to make its platform more valuable as AI agents become mainstream. Its new Conversations Layer brings together tools such as Conversation Memory, Conversation Orchestrator, Conversation Intelligence, Conversation Relay and Agent Connect.
Early customer adoption is encouraging. Car Finance 247 signed a seven-figure deal after testing the platform. Its AI assistant, Carla, has handled nearly 300,000 conversations, with customers engaging with the AI assistant converting to approved leads 1.6 times faster.
Twilio is also winning business from AI-focused companies. It signed an eight-figure deal with a leading AI company during the quarter, while Eltropy used Conversation Relay to build an AI voice agent. OpenEvidence also moved its voice infrastructure to Twilio from a competitor.
The opportunity is compelling. If AI agents interact with customers at scale, those interactions will require communications infrastructure. Twilio is positioning itself to capture that activity.
Still, Twilio is not without risks. Its communications business faces pricing and carrier-cost pressure, while its much higher valuation leaves less room for disappointing growth. In the second quarter of 2026, the cost of revenues rose to $773.2 million from $625.7 million a year earlier, while GAAP gross margin was about 48% versus roughly 49% in the prior-year quarter. Twilio can pass certain A2P fees through to customers, but network cost changes and product mix can still limit gross margin expansion.
CRM vs. TWLO: Which Has a Better Growth Profile?
The Zacks Consensus Estimate points to a meaningful difference in expected growth. Twilio's 2026 revenues and EPS are projected to rise 18% and 20.9%, respectively. For 2027, revenue and EPS growth are expected to be 10.8% and 14.2%, respectively.
Estimates for Salesforce's fiscal 2027 revenue growth stand at 11.4%, while EPS is expected to increase 32.4%. However, fiscal 2028 revenue growth is projected at 9.6%, with EPS anticipated to decline 4.2%.
In simple terms, Twilio has the stronger revenue growth story, while Salesforce has the stronger near-term EPS growth outlook.
Salesforce vs. Twilio: Valuation Face-Off
Valuation creates a clear difference between the two stocks. Twilio trades at a higher P/E multiple of 37.44 versus 14.75 for Salesforce, based on the figures provided. This means investors are paying a considerably higher earnings multiple for Twilio's faster growth.
Image Source: Zacks Investment Research
Stock performance also shows a major gap. TWLO shares have surged 71.5% year to date, while CRM stock has declined 10.2%. Twilio's strong share price advance and higher multiple raise expectations for continued execution, while Salesforce's lower valuation reflects more modest growth expectations.
Image Source: Zacks Investment Research
Final Verdict: Twilio Has the Edge
Salesforce remains a formidable enterprise software company, and its AI progress could eventually reignite overall growth. Its lower valuation also provides an important cushion.
However, Twilio has the edge from an investment point of view. Its faster revenue growth, expanding multi-product adoption and direct exposure to AI-driven customer communications create a more compelling growth story. The 37.44 P/E multiple is clearly a risk, but for investors willing to accept higher valuation risk in exchange for stronger growth potential, TWLO currently has the more attractive investment setup than CRM.
View the Zacks #1 Rank List
Image: Shutterstock
Salesforce vs. Twilio: Which Customer Engagement Stock Has the Edge?
Key Takeaways
Salesforce, Inc. (CRM - Free Report) and Twilio Inc. (TWLO - Free Report) are taking different routes to capture the growing demand for artificial intelligence (AI)-powered customer engagement. Salesforce is expanding beyond traditional customer relationship management with Customer 360, Data 360, Slack and Agentforce. Twilio, meanwhile, is building the communications infrastructure that connects businesses, customers and increasingly AI agents.
Their latest quarterly results show solid execution, but their growth rates, valuations and risk profiles differ. A closer look across fundamentals, growth, valuation and market challenges can help determine which stock has an edge over the other from an investment point of view.
Salesforce: Strong AI Story, But Growth Needs to Accelerate
Salesforce has been the global customer relationship management (CRM - Free Report) software leader for years, according to Gartner. However, its ambitions now extend well beyond CRM. The company is building a broader enterprise platform that brings together customer data, collaboration, applications and AI.
Its acquisition strategy supports this shift. Slack strengthened Salesforce's collaboration capabilities, while Informatica added data management capabilities. Smaller AI-focused acquisitions, including Doti AI and Spindle AI, further support its push into artificial intelligence.
The bigger question is whether Salesforce can turn its huge customer base into a faster-growing AI business. So far, the early signs are encouraging. Agentforce annual recurring revenues (ARR) surpassed $1.5 billion in the second quarter of fiscal 2027, jumping more than 240% year over year. Combined AI and Data ARR, including Agentforce, Data 360 and Informatica Cloud, increased 210% to $3.9 billion. These metrics signify that AI is moving from being a product feature to becoming a potential growth engine for Salesforce.
The major concern is that the company's overall growth remains much slower than its AI metrics. Its second-quarter fiscal 2027 revenues increased 11% to $11.3 billion. For a company of Salesforce's size, double-digit growth is still solid, but investors need stronger evidence that AI can lift the company's broader revenue trajectory.
The reported 102.7% increase in non-GAAP earnings per share (EPS) to $5.90 also needs context. The quarter benefited from a significant gain on strategic investments, including Salesforce's investment in Anthropic. EPS growth should not be viewed as purely reflective of underlying operating growth.
Salesforce, Inc. Price, Consensus and EPS Surprise
Salesforce, Inc. price-consensus-eps-surprise-chart | Salesforce, Inc. Quote
Twilio: An AI-Communications Opportunity
Twilio enters the AI race from a different position. It provides communications and customer engagement infrastructure that businesses can use across voice, messaging and other channels. Its business model is showing stronger near-term growth. Second-quarter 2026 revenues increased 22% to $1.50 billion, while organic revenues grew 17%. Non-GAAP EPS surged 23.5% to $1.47.
Twilio Inc. Price, Consensus and EPS Surprise
Twilio Inc. price-consensus-eps-surprise-chart | Twilio Inc. Quote
Twilio is trying to make its platform more valuable as AI agents become mainstream. Its new Conversations Layer brings together tools such as Conversation Memory, Conversation Orchestrator, Conversation Intelligence, Conversation Relay and Agent Connect.
Early customer adoption is encouraging. Car Finance 247 signed a seven-figure deal after testing the platform. Its AI assistant, Carla, has handled nearly 300,000 conversations, with customers engaging with the AI assistant converting to approved leads 1.6 times faster.
Twilio is also winning business from AI-focused companies. It signed an eight-figure deal with a leading AI company during the quarter, while Eltropy used Conversation Relay to build an AI voice agent. OpenEvidence also moved its voice infrastructure to Twilio from a competitor.
The opportunity is compelling. If AI agents interact with customers at scale, those interactions will require communications infrastructure. Twilio is positioning itself to capture that activity.
Still, Twilio is not without risks. Its communications business faces pricing and carrier-cost pressure, while its much higher valuation leaves less room for disappointing growth. In the second quarter of 2026, the cost of revenues rose to $773.2 million from $625.7 million a year earlier, while GAAP gross margin was about 48% versus roughly 49% in the prior-year quarter. Twilio can pass certain A2P fees through to customers, but network cost changes and product mix can still limit gross margin expansion.
CRM vs. TWLO: Which Has a Better Growth Profile?
The Zacks Consensus Estimate points to a meaningful difference in expected growth. Twilio's 2026 revenues and EPS are projected to rise 18% and 20.9%, respectively. For 2027, revenue and EPS growth are expected to be 10.8% and 14.2%, respectively.
Estimates for Salesforce's fiscal 2027 revenue growth stand at 11.4%, while EPS is expected to increase 32.4%. However, fiscal 2028 revenue growth is projected at 9.6%, with EPS anticipated to decline 4.2%.
In simple terms, Twilio has the stronger revenue growth story, while Salesforce has the stronger near-term EPS growth outlook.
Salesforce vs. Twilio: Valuation Face-Off
Valuation creates a clear difference between the two stocks. Twilio trades at a higher P/E multiple of 37.44 versus 14.75 for Salesforce, based on the figures provided. This means investors are paying a considerably higher earnings multiple for Twilio's faster growth.
Image Source: Zacks Investment Research
Stock performance also shows a major gap. TWLO shares have surged 71.5% year to date, while CRM stock has declined 10.2%. Twilio's strong share price advance and higher multiple raise expectations for continued execution, while Salesforce's lower valuation reflects more modest growth expectations.
Image Source: Zacks Investment Research
Final Verdict: Twilio Has the Edge
Salesforce remains a formidable enterprise software company, and its AI progress could eventually reignite overall growth. Its lower valuation also provides an important cushion.
However, Twilio has the edge from an investment point of view. Its faster revenue growth, expanding multi-product adoption and direct exposure to AI-driven customer communications create a more compelling growth story. The 37.44 P/E multiple is clearly a risk, but for investors willing to accept higher valuation risk in exchange for stronger growth potential, TWLO currently has the more attractive investment setup than CRM.
Currently, Salesforce and Twilio each carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.