Can Salesforce's Data Cloud Business Offset Slowing Growth Trends?

Core Insights - Salesforce, Inc. (CRM) has experienced a slowdown in growth, transitioning from double-digit revenue increases to single-digit growth over the past year, prompting inquiries about future growth drivers [1][10] - The Data Cloud business is identified as a potential key contributor to restoring double-digit revenue growth, with significant customer adoption and integration with other Salesforce products [1][3][10] Financial Performance - In Q2 of fiscal 2026, Salesforce reported a 140% year-over-year increase in customer adoption of its Data Cloud platform, with over half of Fortune 500 companies utilizing it [2][10] - The Data Cloud business is estimated to generate approximately $7 billion annually, indicating substantial revenue growth potential due to its consumption-based pricing model [4] Competitive Landscape - Salesforce faces competition from Microsoft Corporation (MSFT) and Snowflake Inc. (SNOW) in the data cloud service sector [6] - Microsoft integrates its Azure Data platform with existing productivity tools, enhancing user experience and attracting new clients [7] - Snowflake specializes in cloud-based data warehousing, focusing solely on data management and analytics, which differentiates it from Salesforce [8] Valuation and Estimates - Salesforce shares have declined by 23.8% year-to-date, contrasting with a 21.2% growth in the Zacks Computer – Software industry [9] - The company trades at a forward price-to-earnings ratio of 20.72, significantly lower than the industry average of 33.24 [12] - The Zacks Consensus Estimate for fiscal 2026 and 2027 earnings suggests year-over-year increases of approximately 11.4% and 11.3%, respectively, with recent revisions indicating upward adjustments for fiscal 2026 and downward adjustments for fiscal 2027 [13]