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Short selling is enjoying a bit of a comeback of late, despite markets surging over the past few years and inflicting several painful squeezes along the way.
The median short interest in S&P 500 stocks has now climbed to 2.7 per cent — one of the highest readings of the past decade. However, the targets are evolving.
The last time we took a look at Goldman Sachs’ hedge fund positioning data — derived from the regular if often delayed 13F filings that US investment funds have to make — utilities and other AI proxies were in the sights. The most popular short position in a major-ish company (if you go by short interest as a percentage of the company’s market cap) was Bloom Energy, followed by Charter and Reddit.
But there’s a new most hated stock (zoomable version).
A year ago, Strategy — née MicroStrategy — wasn’t even in the top 50 most shorted stocks in America. That made sense, given that bitcoin and “the world’s first digital credit vehicle” were on a tear at the time. The trick to short selling is to pummel something already going down, after all.
But the price of bitcoin against useless analogue fiat peaked in October. Strategy started selling off even before then, and by November it has popped up in third place among the most-shorted US stocks. It has now finally claimed the crown as America’s most hated stock (or at least the most hated stock with a market cap of at least $25bn).
This feels appropriate, for two reasons.
The prosaic reason is that Strategy is a silly construct of digital make-believe and financial engineering that is now collapsing (although the first major cash crunch doesn’t come until 2027). Craig Coben has done God’s work in covering its rise and fall, with his last post summing up Strategy’s struggles well.
Secondly, the most hated football club in the UK is arguably Millwall, whose own fans sign “no one likes us, we don’t care”. The song is based on the melody of Rod Stewart’s song “(We Are) Sailing”. And MicroStrategy’s CEO is called Michael Saylor.
Is this a stupid analogy? Possibly. OK, probably. But it’s no dumber than AI doommaxxing blog posts wiping out hundreds of billions of dollars of stock market value. This is just the world we live in today.
Anyway, the short interest data is as of the end of January, so it predates the recent software stock carnage. But Goldman’s analysts note that many hedge funds had already presciently tiptoed out of prominent software companies and switched into “hard” tech and “old economy” companies like Norfolk Southern, a railway company, and machinery maker ITT.
Hedge funds rotated within Info Tech, moving to Semis from Software ahead of this year’s Software sell-off. Funds entered 2026 carrying a record long portfolio weight in Semiconductors and the lowest weight in Software since 2019. Similarly, GS Prime Services data show hedge funds slashing Software net exposures in recent weeks to the lowest levels in over a decade. At the stock level, AMAT and ASML joined the Hedge Fund VIP list, and TSM ranks among the top 10 VIPs. AMAT also ranked among our list of Rising Stars with the most popular increases in ownership, along with MU, NVDA, and TER. In contrast, software stocks CRM and DOCU screened as Falling Stars with the largest declines in hedge fund ownership.
That said, hedge funds still ambled into the year mega long the likes of Microsoft, Visa, Mastercard, Amazon and Capital One, all of which have been pounded lately. It will be interesting to see what the performance data looks like for the next few months.
