CRM's AI and Data Cloud ARR Surges 120%: Can the Momentum Continue?

Core Insights - Salesforce, Inc. reported strong performance in its AI and Data Cloud segments, with Annual Recurring Revenue (ARR) from these areas reaching $1.2 billion, reflecting a 120% increase year-over-year [1][9] - The Data Cloud business has grown to a $7 billion segment, with a 140% increase in customer base and a 326% rise in data usage during the second quarter [2][9] - The Agentforce AI platform has signed over 6,000 paid deals, with 60% of customers transitioning from pilot projects to full production [3][9] Data Cloud Performance - Data Cloud is now a $7 billion business, with customer growth of 140% year-over-year and data usage increasing by 326% in the second quarter [2][9] - More than half of Fortune 500 companies are utilizing Data Cloud, indicating strong market penetration [2] Agentforce Growth - Agentforce has signed more than 6,000 paid deals, with 40% of bookings coming from existing customers expanding their usage [3] - The introduction of a new pricing model, flex credits, is contributing to 80% of Agentforce bookings, which may enhance recurring revenue over time [3] Future Growth Potential - The combination of Data Cloud and Agentforce is foundational for the Agentic Enterprise, which leverages accurate data to enhance AI agent performance [4] - The Zacks Consensus Estimate predicts revenue growth of 8.8% and 9.1% for fiscal years 2026 and 2027, respectively [4] Competitive Landscape - Competitors like Microsoft and ServiceNow are also advancing AI automation in the enterprise sector, with Microsoft integrating AI features into its Dynamics 365 platform and ServiceNow deploying industry-specific AI tools [5][6] Valuation Metrics - Salesforce shares have decreased by 25.4% year-to-date, contrasting with a 22% growth in the Zacks Computer – Software industry [7] - The company trades at a forward price-to-earnings ratio of 20.48, significantly lower than the industry average of 33.89 [11] Earnings Estimates - The Zacks Consensus Estimate for Salesforce's earnings indicates a year-over-year increase of approximately 11.2% for fiscal 2026 and 11.7% for fiscal 2027, with upward revisions in estimates over the past 30 days [14]