Salesforce stock waffles after announcing $8 billion acquisition offer for Informatica

Salesforce (CRM) stock traded about 1% lower on Tuesday before advancing slightly, an interesting signal following the announcement that it has offered $25 per share or about $8 billion in cash for Informatica (INFA), an enterprise cloud software company. It would be the first major acquisition by Salesforce since its $27 billion buyout of Slack in 2021.

CRM stock is caught wrong-footed here as the indices pitch higher following the Memorial Day weekend. The stock market is digesting US President Donald Trump's walk back of his prior 50% tariff threat on the European Union (EU). Trump said on Sunday that he would revert to July 9 as the deadline for EU trade talks to complete rather than his earlier June 1 announcement.

In other stock market news, Tesla (TSLA) sees April sales in Europe fall nearly by half from a year earlier. PDD Holdings (PDD), the holding company of China's Pinduoduo marketplace, plunges as much as 20% after missing earnings and revenue targets by a wide margin.

The NASDAQ Composite rose 1.4% at the open on Tuesday, while the Dow Jones Industrial Average (DJIA), which includes Salesforce, rose 0.9%. US Durable Goods Orders in April fell 6.3%, but that figure was better than expectations. A huge fall-off in Boeing's (BA) business with Asia hurt the reading as expected, but Durable Goods Orders ex Transportation actually gained 0.2%, better than the -0.1% consensus.

Salesforce stock news

The acquisition of Informatica is all about data. As companies delve deeper into the AI industry, utilizing their data becomes more necessary.

“By uniting the power of Data Cloud, MuleSoft, and Tableau with Informatica’s industry-leading, advanced data management capabilities, we will enable autonomous agents to deliver smarter, safer, and more scalable outcomes for every company, and significantly strengthen our position in the $150 billion-plus enterprise data market," Salesforce CEO Marc Benioff said in a statement.

The deal has already been approved by both firms' boards but isn't expected to be finalized until fiscal 2027, at least a year from now. Benioff's statement demonstrates that Salesforce is intent on using Informatica's abilities to build out its Agentforce offering that allows companies to build autonomous customer service bots.

"Companies are trying to customize their AI. if you're an enterprise, you're looking to make sense of your data. MuleSoft was another data acquisition [with the same interest in mind]," said Mandeep Singh of Bloomberg Intelligence on BloombergTV.

The announcement builds interest in Salesforce's first quarter earnings release, scheduled for after the close on Wednesday. Though its earnings call will surely be overshadowed by Nvidia's (NVDA) earnings release, Salesforce is expected to earn $2.55 in adjusted earnings per share (EPS) on $9.75 billion in revenue.

Salesforce stock forecast

The weekly chart below shows that Salesforce stock remains in a downtrend like most other tech companies at the moment. Support lies in the $225 to $242 region, and CRM stock has not really recovered after breaking through its lower trendline in late March.

CRM weekly stock chart

A bad sign for CRM shareholders is that the share price was forced lower after retesting the 200-day Simple Moving Average (SMA) on May 14. In the near term, CRM might find sustenance at the 50-day SMA, but it needs to reconquer the prior support level of $285 and the 200-day SMA to show any signs that this year's path is upward.

In that sense, rebreaking the $316 support level will be another target for bulls throughout the summer months. It might even be achieved if Benioff offers a major beat-and-raise earnings call on Wednesday. But as with the weekly chart, the Relative Strength Index (RSI) trades below the 50 neutral level, telling us that the path of least resistance is lower.

CRM daily stock chart