Cloud computing remains one of the most important pillars of today’s economy, powering everything from enterprise software and storage to e-commerce, digital services, and artificial intelligence workloads. The emergence and rapid adoption of AI have increased demand for cloud computing, driving revenue growth and attracting investor interest.
An example of this demand was recently seen on Oracle’s Q4 earnings report on June 10, where the firm’s cloud infrastructure revenue nearly doubled year over year. Piper Sandler analyst Billy Fitzsimmons, reacting to the company’s earnings report, said his firm is positive on Oracle’s AI-driven consumption growth, which will likely help the company protect its cloud margins despite rising component costs.
Clay Magouryk, who is the co-CEO of Oracle, also confirmed the demand for cloud computing on his company’s earnings call:
Cloud infrastructure has become a very large market because of the ever-growing demand for server-side computing. AI infrastructure makes the existing cloud infrastructure market look small.
Amid this high demand for cloud infrastructure, it is important to distinguish between strong companies that are beneficiaries of AI and weaker companies that just don’t have it in them to serve the massive demand. One interesting way to do so is to look at the short interest.
Short interest refers to the total number of shares that have been sold short by investors, in the expectation that the stock will decline. The short percentage of float is the shorted shares as a percentage of the company’s total outstanding shares, indicating how much of the investor base expects the stock to decline.
The nature of short selling is that if the company performs well, shorts need to buy back shares to close their positions. This then triggers a buying wave that can cause the stock price to keep going higher. It is precisely this opportunity that we intend to highlight in our list of 7 worst cloud stocks to buy according to short sellers.
Our Methodology
To come up with our list of the 7 worst cloud stocks to buy according to short sellers, we first compiled a list of cloud computing stocks by scanning various industry ETFs. We then shortlisted companies that had a market cap of at least $2 billion and at least 5% of their outstanding shares shorted. These companies have also reported recent investor-worthy news and are listed in ascending order of the short interest as a percentage of total outstanding shares.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Insider Monkey’s quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 599.2% since May 2014, beating its benchmark by 372 percentage points (see more details here).
Note: All short interest data is as of May 29, 2026. All share price data is as of June 12, 2026.
7. Salesforce Inc. (NYSE:CRM)
Short Interest: 8.61%
On June 5, Matthew VanVliet, an analyst at Cantor Fitzgerald, reaffirmed a Buy rating on Salesforce Inc. (NYSE:CRM) stock and set a target price of $250. The firm’s price target reflects an additional 52% upside from current levels.
The cloud software company enjoyed positive analyst sentiment in the first week of June. Three different analysts raised their price targets on the stock, including Barclays, RBC Capital, and Goldman Sachs. Among these, Goldman has the highest price target on the stock of $242.
On June 1, at the Choose France summit, Salesforce announced it would invest $2 billion in France through 2030. In this plan, the company will launch a new AI Innovation Hub in Paris and expand support for AI education, workforce training, customers, and partners in the country.
The news comes after the company already expanded its AI center in London, the financial hub of Europe, on May 20. The investment in Paris shows how the company’s management is focused on serving enterprises in the European region, which it considers a key market.
Marc Benioff, chair and CEO of Salesforce, remarked,
We are proud to deepen our commitment to France with this significant investment. France has become one of the world’s great centers of AI innovation, combining extraordinary research talent, entrepreneurial energy, and a strong commitment to trusted technology. We look forward to helping organizations across France and the region unlock a new level of agentic transformation.
Salesforce Inc. (NYSE:CRM) is a global enterprise software company that provides customer relationship management (CRM) and cloud-based business applications across sales, service, marketing, commerce, and data analytics. Its Customer 360 platform, powered by data tools and trusted AI, enables organizations to unify customer data and drive personalized engagement.
6. Nutanix Inc. (NASDAQ:NTNX)
Short Interest: 9.94%
On May 28, Piper Sandler lowered its price target on Nutanix Inc. (NASDAQ:NTNX) to $60 from $63 and kept an Overweight rating on the stock. The downward price target revision still reflects 28% upside from current levels. The price target revision came after the company announced its Q3 2026 earnings report.
On May 28, Nutanix Inc. (NASDAQ:NTNX) posted its Q3 2026 earnings. The firm reported revenue of $703 million, which comfortably beat the Wall Street consensus of $690 million. The earnings per share came in at $0.47, which exceeded the analysts’ estimates of $0.36. The company’s free cash flow stood at $197 million, which represented a 28% margin.
The company remains cautious on Q4 guidance due to the Middle East conflict, as the situation remains uncertain in the region, affecting the company’s business. For Q4 2026, the company has raised its revenue guidance to between $725 million and $745 million. Free cash flow is expected to reach $760 to $780 million.
Nutanix Inc. (NASDAQ:NTNX) operates an enterprise cloud platform across the Middle East, Europe, Africa, North America, Latin America, and the Asia Pacific. The company delivers hyperconverged infrastructure software, Nutanix Cloud Infrastructure, Nutanix AHV, Nutanix Cloud Platform, and others.
While we acknowledge the potential of NTNX to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than NTNX and that has 100x upside potential, check out our report about the cheapest AI stock.
Click to continue reading and see the 5 Worst Cloud Stocks To Buy According to Short Sellers.
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