Data is the bedrock of artificial intelligence (AI), but many businesses find their data is trapped in different silos. Salesforce is helping unlock the value of that data and take advantage of the enterprise AI opportunity. Both Salesforce and UiPath report their latest results on Wednesday.
Last week, at its annual Connections conference in Chicago, cloud favourite Salesforce [CRM] announced that it’s expanding the capabilities of its Einstein Copilot AI assistant.
This new range of tools has been built specifically for marketing, commerce and sales teams. Marketers and merchants often struggle to leverage the right data from the right touch points, impeding the personalisation of their sales and marketing strategies. These new tools aim to solve this.
One of them, Einstein Personalisaton, allows brands to use real-time data from Salesforce’s Data Cloud to deliver marketing campaigns and push tailored offers to customers based on their past buying behaviour. Another, Data Cloud for Commerce, enables online store owners to manage their businesses better by bringing all of their data together.
As Salesforce AI CEO Clara Shih explained to Bloomberg, businesses often have multiple systems, data warehouses and data lakes. Salesforce’s Data Cloud enables businesses to “bring together all of their trapped, siloed data from across the enterprise”, Shih said. Customers can even import data from third parties, including Snowflake [SNOW] — the two companies agreed to a data-sharing partnership in September last year.
Salesforce Data Cloud Helps Underpin the AI Revolution
Data Cloud has become the fastest-growing organic product in Salesforce’s history. Though the exact figure wasn’t provided, Salesforce did reveal on its Q4 2024 earnings call in February that Data Cloud’s annual recurring revenue was nearing $400m, a year-over-year growth rate of approximately 90%. A quarter of the deals over $1m signed in Q4 included Data Cloud.
President and Chief Operating Officer Brian Millham told analysts on the call that this level of growth is “an indicator of the demand that we’re seeing for people to get ready for the AI transformation”. Meanwhile, Chair and CEO Marc Benioff said its Data Cloud offering is “like a rocket ship” because “the entire AI revolution is built on this foundation of data”: no AI application will work unless all data is unified and the experience of accessing it is seamless.
Benioff praised the likes of Microsoft-backed [MSFT] OpenAI and Amazon-backed [AMZN] Anthropic for the way they amalgamate data. Other chatbots “just sit and spin because they can’t figure out what the data means … but when they use Salesforce, it all of a sudden becomes intelligent,” he added.
Salesforce will “execute like hell” on the Data Cloud offering over the next year.
Guidance Doesn’t Reflect AI Impact
While artificial intelligence dominated the discussion on the Q4 earnings call, Salesforce guided towards a modest 8–9% year-over-year increase in revenue in fiscal 2025, to $37.7–38bn.
For Q1 2025, which is being reported on Wednesday, revenue is expected to grow 11% to $9.1–9.2bn.
Millham said on the Q4 earnings call that much of the potential AI revenue hasn’t been factored into 2025’s guidance “because there is so much work that needs to happen now”, though he added that investors should expect a “big upside” going forward.
Tailwinds Lifted UiPath’s Q4 2024 Revenue to Record Level
UiPath [PATH] is another AI play that reports earnings on Wednesday.
The name may not garner the attention that the likes of Nvidia [NVDA] do, but the company plays a crucial role in developing software used in automating business processes across a wide range of industries, including manufacturing, logistics and financial services.
“The combination of UiPath’s AI and automation is the strategic change enabler for our customers that makes any digital transformation easier and faster while empowering customers to innovate, adapt more quickly, and grow,” said UiPath CEO Rob Enslin in the Q4 2024 earnings release in March.
AI hype drove revenue in the last quarter to a record $405m, up 31% year-over-year, while revenue for Q1 2025 is expected to cool slightly to a range of $330–335m, up 14.7% at the midway point from Q1 2024’s $290m.
Nvidia Earnings Weigh-In
Nvidia’s recent performance has bolstered AI stocks and could continue to buoy sentiment for the theme.
The AI powerhouse’s revenue ballooned by 262% year-over-year in Q1 on unrelenting AI chip demand, with its data centre business (its most profitable segment) reporting a revenue jump of 427%. According to Chief Financial Officer Colette Kress, more than 40% of data centre revenue can be attributed to large cloud providers.
In order to capitalise on its market success, Nvidia is hoping to sustain its stock rally — the share price is up 115% year-to-date — with a 10-for-1 stock split next month, which should make the stock accessible to a wider pool of investors.
Salesforce Share Price Loses Steam
Salesforce’s stock rally has tailed off in the last month through 28 May, during which time the share price has fallen 0.7%, but the stock is up 29.9% in the past year and up 3.6% year-to-date. The UiPath share price is up 30.8% in the past year and down 23.6% year-to-date.
As well as owning Salesforce and UiPath shares outright, another way to gain exposure to them is through thematic ETFs.
The Global X Artificial Intelligence and Technology ETF [AIQ] holds Nvidia, Salesforce and UiPath, with weightings of 4.9%, 2.7% and 0.2%, respectively, as of 24 May. The fund is up 36.2% in the past year and up 10.3% year-to-date.
The Themes Generative AI ETF [WISE] also holds all three stocks, with weightings of 7.9%, 1.6% and 3.1%, respectively, as of 28 May. The fund is up 12.3% since its launch on 8 December last year.
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