Shorts bailed around Q1 squeeze; Active long buying ahead of Q2 earnings AH on June 26.

Early-Year Bear Build: Short interest rose steadily from January to mid-March, as the share price trended higher in January and then retraced in February.

March 27 Earnings Spike: The stock surged after earnings on March 27, driven by better-than-expected EPS and an operating margin rebound. Management also reaffirmed full-year guidance and highlighted strong free cash flow and AI platform momentum.

Forced Buying Surge: Rapid price action suggested a classic short squeeze, pressuring bearish positions.

Bearish Trades Unwind: Short interest continued to drop as traders exited positions, even after the stock gave back most of its post-earnings surge.

Institutional Positioning Shifts: S3 Long Interest data reveals that active managers added over 7 million shares YTD—a 52% increase—while hedge funds boosted holdings by 36%. In contrast, passive investors trimmed exposure by 4 million shares, signaling a rotation toward conviction-led strategies as bearish sentiment began to unwind.

Less Shorted, More Owned: CNXC is no longer peak short side crowding, with S3 Squeeze Risk score down to 57 out of 100, however with 13% of float short it is still a popular position. Active long participation has increased, with more hedge funds and active managers getting into the trade on the long side.

Bottom Line: Active long buying and a still-sizeable short base set the stage for an amplified earnings reaction. Options are pricing in a 10% one-day move.

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