Jefferies’ Top Crowded Software Short Positions: Top 9 Stocks

6. Salesforce, Inc. (NYSE:CRM)

Number of Hedge Fund Holders In Q2 2024: 117

Shares Short % Of Outstanding: 1.72%

Salesforce, Inc. (NYSE:CRM) is one of the biggest customer relationship management software product providers in the world. It held a 21.7% share of the market in 2023, which provides the firm with access to sizeable data resources. These are key in the artificial intelligence industry, and Salesforce, Inc. (NYSE:CRM) is leveraging its strengths, too. The firm offers customers an unbelievable 8 trillion data points to run their AI campaigns and makes Salesforce, Inc. (NYSE:CRM) one of the more important firms when it comes to leveraging AI in the advertising industry. Yet, since it’s a SaaS company, it has to deliver on growth and cost control or otherwise falter no matter how many data points it offers. Consequently, Salesforce, Inc. (NYSE:CRM)’s shares are up by a modest 12.6% year to date, as they recover from the massive 19.7% drop in May. This drop was in the aftermath of the first fiscal quarter earnings report, which saw Salesforce, Inc. (NYSE:CRM) miss $9.17 billion of analyst revenue expectations by posting $9.13 billion. The higher end of its Q2 guidance of $9.25 billion also missed consensus estimates of $9.37 billion. Investor concerns about growth slowdown persist, as Salesforce, Inc. (NYSE:CRM) struggles with tight budgets and longer sales cycles.

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.”