Salesforce heads into its May 27 Q1 FY2027 earnings with the short-seller retreat that began mid-week accelerating — and options traders holding their most bullish posture of the past year.
The short unwind is the week's clearest development. Short interest has fallen to 6.9% of the free float, down from the ~8.6% level flagged in last week's note and well off the early-May peak near 9.1%. In raw share terms, shorts shed roughly 8.3% over the past week. The previous note correctly identified a deliberate pre-earnings bearish thesis; that thesis is now being partially dismantled, not reinforced. Days to cover on FINRA's official count remains at 5.3 days — enough residual positioning to matter if the print surprises to the upside. Borrow costs have also eased, dropping roughly 22% on the week to just 0.40%. Availability is ample at around 600% of estimated short interest, meaning the lending market is placing no practical constraint on either new short positions or further covering.
Options positioning reinforces the cautious-to-bullish pivot. The put/call ratio dropped to 0.75 on Tuesday — more than three standard deviations below its 20-day mean of 0.82 — making this the most call-skewed reading of the past 52 weeks. That's a striking read: options desks are reaching for upside exposure, not downside protection, in the final week before results. The combination of short covering and call demand points to a market that is repositioning, not hedging.
The Street is a more complicated picture. BofA Securities reinstated coverage this week with an Underperform rating and a $160 target — a notable bearish signal given the firm's weight and the timing, just days before earnings. Citigroup trimmed its target to $188 earlier in the month, maintaining Neutral. Bulls on the Street — including BTIG at $255 and Piper Sandler at $215 (Overweight, though the target was cut from $250 in April) — frame the Agentforce AI platform as the growth driver that justifies a re-rating. The consensus mean target sits near $265, well above the current $179.42 price. The bear case centres on Agentforce execution risk, hallucination issues limiting enterprise adoption, and the lingering drag from the Slack integration. Factor scores don't tilt the argument decisively either way: the short score has eased to 52.6 from a high of 55.3 earlier this month, consistent with the covering trend, while EPS momentum ranks in the low-to-mid 40s — modest, not alarming.
One ownership note worth flagging: Morgan Stanley reported adding over 13 million shares in the most recent filing period, taking its position to 25.5 million shares — the largest incremental addition among the top 15 holders. That move partially offsets the bearish read from the BofA reinstatement. Founder and CEO Marc Benioff sold roughly $4.3 million worth of stock on April 22 at $189.80 — a routine-looking disposition given his 2.7% stake, and at a price above where the stock trades today.
Earnings reactions give useful context. The last print, on February 25, sent the stock up 7.6% on the day and 4.1% over the subsequent week — a clean beat-and-rally pattern. Close peers have had a strong week: HUBS gained 15.9% and NOW added 14.4%, while CRM managed a more modest 4.7% — suggesting the group tailwind is real, but Salesforce is not fully participating in it ahead of its own event.
With short interest still at nearly 7% of the float, a call-heavy options market, and BofA's fresh Underperform sitting alongside multiple bull targets above $215, the May 27 print is set up as a genuine inflection point — the question is whether Agentforce momentum can flip the narrative or whether execution concerns give the remaining bears reason to rebuild.
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