Salesforce’s $8 Billion AI Bet on Informatica Could Backfire Spectacularly

Salesforce just dropped $8 billion on an AI-powered cloud data management leader and it might not be the strategic masterstroke Marc Benioff wants investors to believe, rather it’s a desperate attempt to paper over fundamental growth challenges with expensive financial engineering.

While competitors are chasing headlines with AI assistants, its been said that Salesforce is quietly building the plumbing that could make or break the next generation of business AI. Informatica’s unglamorous but essential data governance tools will transform Salesforce’s Einstein AI and new Agentforce platform into something unprecedented. AI agents that actually understand what they’re looking at.

The stakes couldn’t be higher. As companies rush to deploy AI across their operations, most are discovering their data is too fragmented, unreliable, or poorly understood to power truly autonomous systems. Salesforce’s $8 billion gamble is that whoever solves this “AI trust” problem first will control the future of enterprise automation.

Marc Benioff calls it building “the ultimate AI-data platform.” Wall Street might call it the acquisition that determines whether Salesforce stays ahead of Microsoft, Google, and Amazon in the next phase of the AI revolution.

This is not the first time that Salesforce has tried to acquire Informatica. 

The companies were in advanced talks to reach an acquisition, even last year. However, Reuters reported that the deal was taken off the table.

In early 2023, Salesforce’s acquisition strategy faced criticism from activist investors such as ValueAct Capital and Elliott Management, who urged the company to make strategic shifts. Consequently, Salesforce responded by initiating cost reductions, increasing stock repurchases, and eliminating its mergers and acquisitions board committee.

Wall Street’s Mixed Verdict

Now this blockbuster acquisition is drawing mixed reactions from Wall Street analysts, while some  see the deal as a strategic necessity others see it as something that comes with a hefty price tag.

Morgan Stanley analysts are bullish on the AI angle, arguing that the AI potential within Salesforce isn’t fully reflected in the current stock price. They believe Salesforce has “significant room for upside” despite recent earnings challenges, positioning the Informatica deal as a catalyst for that growth. Not all reactions are unequivocally positive. Loop Capital maintained a more measured stance, keeping a hold rating with a $300 target while acknowledging the acquisition’s potential to positively impact margins, earnings, and cash flow.

The Growth Slowdown Reality

DA Davidson analyst Gil Luria, who maintains an “underperform” rating on Salesforce with a $200 price target, is particularly skeptical about acquiring what he calls a “legacy technology company that has lost its growth.” His key argument is simple yet damning that you can’t fix a growth problem by buying another company with growth problems.

Luria notes that Informatica has a “suboptimal execution track record and legacy technology offerings,” raising questions about whether Salesforce is essentially buying yesterday’s technology to solve tomorrow’s AI challenges. 

In an industry where technological obsolescence happens at breakneck speed, betting $8 billion on aging infrastructure seems risky at best.

Perhaps the most stinging criticism comes from analysts who see this acquisition as financial engineering designed to mask Salesforce’s own slowing momentum. Luria specifically noted that “part of the reasoning for the rerating was that Salesforce would start covering up its slowing organic growth with acquisitions.”

The timing is telling. Luria is already “street low” for fiscal 2026 revenue growth at 5.5% versus consensus of 7.5%, suggesting he believes Salesforce’s core business is decelerating faster than the market realizes. If this assessment is correct, the Informatica deal becomes a expensive band-aid rather than a strategic transformation.

The technical challenges of integrating Informatica’s systems with Salesforce’s existing infrastructure could prove overwhelming. Concerns have been raised regarding Salesforce’s plans to combine Informatica’s established data management functionalities with their own recently developed data cloud platform.

The Organic Growth Alternative

The most compelling alternative to risky acquisitions is accelerating internal AI development. Recent analyst reports highlight that “AI-driven growth fuels stock optimism” for Salesforce, suggesting the market still believes in the company’s organic capabilities.

Rather than acquiring aging data management firms, Salesforce could reallocate that $8 billion toward hiring top AI talent from competitors like OpenAI and Google, building proprietary large language models for CRM workflows, and developing more sophisticated AI agents within its existing architecture.

This approach would avoid the integration risks that have plagued previous deals while maintaining technological coherence across the platform something the Informatica acquisition threatens to disrupt.

Multiple analysts have flagged renewal pressure and new business challenges facing Salesforce, indicating the company needs to focus on retaining existing customers rather than chasing shiny new technologies.

The alternatives here are less glamorous but potentially more profitable. Salesforce’s platform has become notoriously complex, streamlining the user experience could improve customer satisfaction and reduce churn more effectively than any acquisition. Similarly, with competitors like HubSpot and Microsoft Dynamics offering more affordable alternatives, delivering better value at existing price points might be more important than expanding through deals.

Building deeper vertical expertise in high-growth sectors like healthcare and financial services could also drive growth without the risks of major acquisitions.

Instead of owning everything, Salesforce could achieve similar AI capabilities through strategic partnerships that avoid integration nightmares. Despite being competitors in some areas, a deeper collaboration with Microsoft on AI and cloud infrastructure could benefit both companies without acquisition complexity.

Focus on What Works

Direct partnerships with leading AI companies like OpenAI could provide cutting-edge capabilities without the overhead of managing legacy technology stacks. Rather than owning data management companies, Salesforce could create a network of certified data partners that integrate seamlessly with its platform.

The company has positioned its Agentforce platform as a key growth driver. Rather than diluting focus with acquisitions, the company could invest heavily in making Agentforce the definitive enterprise AI agent platform, build a robust ecosystem of third-party applications, and focus on specific use cases where AI agents deliver immediate ROI.

This concentrated approach could yield better results than trying to integrate Informatica’s disparate technologies into a coherent AI strategy.

Given the skepticism around Salesforce’s acquisition track record, including pressure from ValueAct Capital and Elliott Management, the most shareholder-friendly alternative might be increasing share buybacks and dividends.

With analysts predicting growth might slow to high single digits and noting that margin expansion has reached its peak, returning excess capital to shareholders could be more valuable than risky acquisitions. This would signal confidence in the core business while addressing activist concerns about capital allocation.

Instead of buying companies, Salesforce could focus on expanding its addressable market through deeper penetration in emerging markets where CRM adoption is still growing, building more affordable solutions for underserved small and medium businesses, and expanding specialized offerings for government clients.

The Real Test Ahead

These strategies require execution rather than integration, playing to Salesforce’s existing strengths rather than betting on unproven synergies.

The common thread in these alternatives is a focus on execution and optimization rather than expansion and acquisition. Despite recent AI growth, Salesforce disappointed on fiscal 2026 forecast,  suggesting the market wants to see consistent execution on existing initiatives before funding new adventures.

For investors and analysts watching Salesforce’s next moves, the key question isn’t whether the Informatica deal will work, it’s whether management has the discipline to choose sustainable growth over headline-grabbing acquisitions.