Salesforce makes a big bet on booming tech market

Salesforce  (CRM)  is still recovering from a difficult start to the year, but the former software leader just gave investors a reason not to count it out yet.

The company rose to market prominence as a leader in the software-as-a-service space, helping define customer relations management (CRM) in the modern office. As the industry has shifted toward artificial intelligence (AI), though, Salesforce has struggled to integrate the revolutionary new technology into its software platforms.

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Despite its high exposure to the booming market, Salesforce stock has struggled over the past two quarters and is currently down more than 16% for the six-month period. The company recently reported strong earnings for Q1, issuing an optimistic forecast, but even this news failed to boost shares.

However, Salesforce recently announced an important agreement it just inked. This deal has important implications for the company’s growth plans.

Salesforce has important news for AI investors

Salesforce stock has trended downward over the past few months, and some investors have wondered why. Some experts have speculated that CRM stock may be a victim of both poor timing and high expectations, specifically regarding AI.

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In November 2024, an investor’s guide from Fortune described application software, referring to platforms designed for users to perform specific tasks, as a sector that hadn’t quite realized the benefits of AI integrations. Vice President Angelo Zino, with market intelligence firm CFRA Research, noted that he saw Salesforce as a likely winner of the Agentic AI boom.

He isn’t the only one who believed Salesforce had the potential to capitalize on the rise of Agentic AI, which allows AI systems to perform tasks with little human intervention. The company recently announced that it has entered into a tentative agreement to acquire software development company Informatica in an $8 billion all-cash deal.

While its name might not be widely known, Informatica is considered a leader in the enterprise cloud data management space and is known for its integrated data solutions. Wedbush Securities technology analyst Daniel Ives describes it as a “gold mine of data,” highlighting the implications this deal could have.

“Salesforce is acquiring data, [Informatica’s] customer base, and the ability to cross-sell. And in the AI revolution, data is king,” he states.

Marc Benioff, CEO of Salesforce, believes this acquisition will help redefine the industry, creating a force within the booming market. In a statement released by his company, he revealed that he sees it creating “the most complete, agent-ready data platform in the industry.”

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Experts such as Baird Managing Director Ted Mortonson have speculated that Salesforce likely didn’t have the data necessary to deliver on Benioff’s agentic AI vision. But now that it will be adding Informatica’s vast data resources, it will likely have an easier time expanding into this area, at least as some experts see it.

Its market remains competitive, but Salesforce is powering forward

This deal comes at a highly pivotal time for Salesforce, as many other companies are doubling down on agentic AI. Other leaders in the tech space, such as Google Deepmind, OpenAI, Meta Platforms, and Microsoft, are all looking to cash in on the new phase of AI, and some have made notable advances.

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Zino also notes that simply having extensive data isn’t the only key to success. He also stresses the importance of delivering personalized insights to customers in useful and efficient ways. 

However, the analyst says, “This acquisition is highly complementary in terms of having a data provider and then having more [than] the company that manages this data.”

Salesforce stock may continue to lag in the short term, as the company maneuvers to catch up with its competitors and establish itself as a key player in the field of agentic AI. But experts seem steadfast in their conviction that this acquisition will help the company accomplish this goal.

In recent years, Benioff has been criticized for his aggressive M&A strategy, which has led to Salesforce acquiring 70 companies since 2006. Now, however, it may be the thing that helps his company remain competitive in a fast-growing market. 

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