Eric Jackson shorts Salesforce and four other software stocks, citing AI Paradox research

Eric Jackson Shorts Salesforce, Asana And Other Software Stocks - Nebius Group (NASDAQ:NBIS), NVIDIA (NAS

Eric Jackson Is Short Salesforce And Other Software Stocks: Inside 'AI Paradox' Market Hack NVDA stock is climbing. See the chart and price action here. SaaS Shorts Jackson says his bearish position is rooted in what he calls the "AI Paradox." After reading 716 corporate earnings transcripts, Jackson claims to have found a statistically significant pattern: the more a company talks about artificial intelligence, the worse its forward stock returns -- by an average 5.4% relative to peers. "The companies that talk about AI the most have the worst forward stock returns," Jackson wrote. "It's statistically significant. I call it the AI Paradox." His thesis challenges the popular narrative that AI hype automatically translates to business growth. Many software executives, Jackson argues, have leaned heavily on AI buzzwords to excite investors rather than showcase operational results. In essence, frequent AI mentions are a red flag -- not a bullish signal. Cybersecurity Longs Unlike overhyped SaaS platforms, he believes AI genuinely strengthens these companies' core business value, enhancing detection, prevention, and automation capabilities. His "AI Paradox" may ultimately capture a shift from storytelling to measurable execution as Wall Street reevaluates how much AI optimism is already priced in and what effect AI will have on the software industry. Photo: Who is Danny / Shutterstock This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Market News and Data brought to you by Benzinga APIs To add Benzinga News as your preferred source on Google, click here.

Eric Jackson shorts five software stocks citing 'AI Paradox' By Investing.com

Investing.com -- Hedge fund founder Eric Jackson announced Tuesday he has taken short positions in Asana, Salesforce, Five9, DocuSign, and Atlassian, citing research that shows companies discussing AI most frequently on earnings calls underperform their peers. Jackson, known for his activist campaign with Opendoor Technologies last year, published findings from an analysis of 716 earnings calls across software companies. The research showed companies in the top quintile of AI language density underperformed those in the bottom quintile by 5.4 percentage points over the following 90 days, with a p-value of 0.043. The investor called the pattern the "AI Paradox," arguing that management teams use AI narratives to address underlying threats from AI automation. Jackson's analysis covered 147 earnings call transcripts across 21 enterprise software companies. Jackson pointed to Chegg as an example of the pattern. The education technology company fell from a $14 billion valuation in February 2021 to $0.67 per share after ChatGPT's launch affected its homework help subscription business. The stock dropped 48% in a single day following the company's Q1 2023 earnings call. The research suggests enterprise software companies face pressure from AI agents that can perform structured, repetitive workflows without requiring per-seat licenses. Jackson cited Klarna's decision to replace Salesforce with an internal AI system and shut down 1,200 software vendors as an example of this shift. Despite the short report, all five targeted stocks traded higher Tuesday. Atlassian (NASDAQ:TEAM) rose 1.7%, Five9 (NASDAQ:FIVN) gained 0.5%, Salesforce added 0.4%, DocuSign (NASDAQ:DOCU) increased 0.2%, and Asana (NYSE:ASAN) climbed 2.9%. This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.