Salesforce, Inc. (NYSE:CRM) shares surged 22.6% on August 27 after the company reported fiscal second-quarter 2027 results that challenged a major concern in the software sector: that artificial intelligence could weaken the seat-based model that has long driven enterprise SaaS. Jim Cramer, on Mad Money on August 27, said that the bearish case extended beyond pressure on software seats to the possibility that AI companies could eventually displace application vendors.
They believed that it would become obvious to everyone that the whole software as a service space was a dying model because they charge per seat and with AI, you simply won’t need as many people to work at your company. So Salesforce had to charge less.
The expanded Anthropic relationship provides a counterpoint to the displacement thesis. Salesforce and Anthropic launched Claudeforce, integrating Claude with Salesforce’s data, workflows, and business logic.
Fiscal Q2 2027 Results Challenge the Immediate Bear Case
Salesforce, Inc.’s (NYSE:CRM) latest results provided little evidence of an immediate collapse in demand. Revenue reached $11.3 billion, up 11% year over year, while current remaining performance obligation rose 14% to $33.5 billion. Subscription and support revenue reached $10.8 billion, up 12% year over year. Non-GAAP operating margin was 34.1%. Furthermore, Agentforce and Data 360 annual recurring revenue reached nearly $3.9 billion, up over 210% year over year. Agentforce ARR exceeded $1.5 billion, up over 240% year over year.
Salesforce also said bookings from its premium Agentforce offerings more than doubled quarter over quarter. The company raised fiscal 2027 revenue guidance to $46.1 billion to $46.4 billion, representing growth of 11% to 12% year over year. Cramer pointed to the metrics most relevant to the displacement thesis:
They delivered their strongest net new annual order value growth in four years. All seats grew year-over-year. Pricing was strong. Attrition was near its lowest level ever.
Bear Case Has Not Disappeared
AI could still reduce the importance of human software seats as agents increasingly interact directly with enterprise data and applications. The more consequential risk is that AI changes the economics of software before Salesforce, Inc. (NYSE:CRM) can replace seat-based revenue with consumption- or outcome-based pricing. Frontier AI companies also remain potential competitors even as they partner with established software vendors. While that makes Salesforce’s expanded relationship with Anthropic strategically important, it is not necessarily proof of a permanent competitive alignment.
Institutional positioning and short interest
Hedge-fund positioning offers a mixed signal. Insider Monkey, which tracks more than 1,000 hedge funds, shows 99 hedge funds held CRM in the second quarter, down from 101 in the first quarter. The two-holder decline does not show institutional capitulation, but it also falls short of showing a broad increase in hedge-fund conviction. Harris Associates has remained the top hedge fund shareholder over the past several quarters and held 16.15 million shares in Q2. Short interest similarly indicates some caution rather than aggressive speculative positioning as it is around 3.35% of the public float. The relatively modest short position makes the 22.6% rally difficult to characterize as primarily a short squeeze. The move instead shows a sharp reassessment of the probability and timing of AI-driven disruption. Cramer concluded, “I don’t think it’s done going higher.”
The long-term economics of enterprise software are still being reshaped by AI. For Salesforce, Inc. (NYSE:CRM), the opportunity is to capture more spending as customers deploy AI across their businesses without giving up the recurring revenue economics of its existing platform. For now, the latest numbers suggest the market had become too pessimistic about the speed at which AI would disrupt Salesforce. The stock’s sharp rebound reflects that change in expectations.
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