Jefferies’ Top Crowded Software Long Positions: Top 10 Stocks

4. Salesforce, Inc. (NYSE:CRM)

Number of Hedge Fund Holders In Q2 2024: 117

Shares Short % Of Outstanding: 1.72%

Salesforce, Inc. (NYSE:CRM), as its ticker might suggest, is a customer relationship management software provider. It is one of the largest players in its industry and commanded 21.7% of the market in 2023. Salesforce, Inc. (NYSE:CRM)’s scale is evident by the fact that it offers customers a whopping 8 trillion data points to run their campaigns. This is a key advantage in today’s AI driven industry, as data is the oil for artificial intelligence training. However, despite its considerable strengths, Salesforce, Inc. (NYSE:CRM)’s shares are down 12.6% year to date. This is driven by a sizeable 19.7% drop in May after the firm’s fiscal first-quarter earnings disappointed on the growth front of SaaS stock valuation. Salesforce, Inc. (NYSE:CRM)’s revenue grew by 11% to $9.13 billion in the quarter but analysts had penciled in $9.17 billion. Its Q2 higher-end guidance of $9.25 billion also missed broader consensus estimates of $9.37 billion. Another worrying factor for investors is Salesforce, Inc. (NYSE:CRM)’s inability to increase the portion of large deals in its deal portfolio.

Salesforce, Inc. (NYSE:CRM)’s management shared details about its plans to increase deal value during the Q1 2025 earnings call:

“Data Cloud gives every company a single source of truth and you can securely power AI insights and actions across the entire Customer 360.

Now let me tell you why I’m excited about Data Cloud and why it’s transforming our customers and how it’s preparing them for this next generation of artificial intelligence. Data Cloud was included in 25% of our $1 million plus deals in the quarter. We added more than 1,000 data cloud customers for the second quarter in a row. 8 trillion records were ingested in the Data Cloud in the quarter, up 42% year-over-year and we processed 2 quadrillion records, that’s a 217% increase compared to last year. Over 1 trillion activations drove customer engagement, which is a 33% increase year-over-year. This incredible growth of data in our system and the level of transactions that we’re able to deliver, not just in the core system but especially in data cloud is preparing our customers for this next generation of AI.”