CRM enters its August 26 earnings report carrying a striking divergence: short sellers have been covering aggressively while the Street remains split on whether Agentforce is a growth story or a distraction.
The most dramatic development this week is the pace of short covering. Short interest dropped 27% in a single session on August 11, falling to 3.0% of the float — its lowest reading in months. That one-day swing of roughly 10 million shares is the largest single-session covering event in the 30-day window. The trend is unambiguous: from a peak near 47 million shares short in mid-July, positions have been unwound by more than a third. Borrow conditions reinforce the story of an exit rather than a squeeze — cost to borrow is a negligible 0.43%, and availability has expanded to roughly 5,500%, up sharply from just 1,374% in early July. There are more than 500 million shares available to borrow against the roughly 29 million currently lent out. This is not a squeeze story. Shorts are leaving of their own accord. Options confirm the shift: the put/call ratio at 0.79 sits slightly below its 20-day average of 0.81, meaning options traders are marginally more bullish than their recent baseline — a muted but consistent signal that the hedging tone has softened heading into the print.
The Street remains genuinely divided on what that print will deliver. Two upgrades landed this morning: UBS's Karl Keirstead raised his target from $185 to $210 while keeping a Neutral rating, and Wells Fargo moved its target from $200 to $205 at Equal-Weight. Both moves are constructive at the margin, but neither firm crossed into outright bullish territory — and that restraint matters. The Morgan Stanley downgrade three weeks ago, cutting to Equal-Weight from Overweight with a target slash from $287 to $185, still shapes the conversation. The consensus mean target of $242 implies more than 22% upside from the current $197.47 close, but the targets are spread wide enough that the mean is almost meaningless. Bulls, led by Evercore ISI with a $250 Outperform and Guggenheim's $228 Buy, point to the Fin acquisition as a credible acceleration of the Agentforce360 strategy and note that at 3.7x EV/NTM recurring revenue, valuation is genuinely undemanding. Bears, as captured in the factor scores, flag a weak analyst recommendation differential — ranking only in the 7th percentile — and 30-day EPS momentum at the 40th percentile, signalling that estimate cuts are still flowing through. The EV/EBITDA multiple, at 9.0x, has drifted lower over the past month, consistent with a market that's trimming rather than expanding its willingness to pay.
The one institutional holding worth noting is Capital Research and Management, which added roughly 1.6 million shares in the most recent reported period — a meaningful addition for a non-passive manager with a 5.3% stake. BlackRock added around 1 million shares. Both moves are against the grain of the broader short-side exit and suggest at least some long-only buyers are constructively positioned ahead of August 26.
CRM's most recent earnings print, in late May, produced a 7.7% one-day gain — the largest single-day reaction in the available history — followed by a further 6.3% over the subsequent five sessions. The print before that went the other direction, with a 1.6% decline on the day that reversed into a 6.4% five-day gain. The pattern suggests that whatever the initial reaction, the five-day tape has tilted positive. The stock is up 21% over the past month and 3.4% on the week, modestly lagging close peers: NOW gained 8.0% on the week, WDAY added 5.8%, and GWRE led the cohort at 10.2%. CRM's underperformance relative to the peer group is a quiet signal that investor conviction is still building rather than already priced in.
What to watch on August 26: how management frames Agentforce pipeline conversion — specifically whether bookings growth is accelerating or whether the Fin acquisition is covering for organic softness — will likely determine whether the covering trend in short interest resumes or reverses.
See the live data behind this article on ORTEX.
Open CRM on ORTEX →ORTEX Market Intelligence content is generated by AI from a snapshot of ORTEX's proprietary data. Content is informational only and does not constitute investment advice.
