Short Sellers Lose Billions as Market Rally Continues
Short sellers, investors who bet on stock prices to decline, have faced significant losses in 2025, with $73 billion wiped out from US and Canadian markets. The S&P 500 has surged by 4% this year, fueled by gains in technology and energy companies.
Super Micro Computer (SMCI), the index's top performer, has witnessed an impressive 110% increase since January, causing short sellers to lose over $2.2 billion. This rally is attributed to a short squeeze, a phenomenon that occurs when a surge in stock prices forces short sellers to buy back the stock to cover their losing bets, driving prices even higher.
Short sellers also face challenges from popular meme stocks and nuclear AI plays that have exhibited high susceptibility to short squeezes. Hims & Hers Health (HIMS), Oklo (OKLO), and BigBear.ai (BBAI) have all experienced significant gains, leading to losses for short sellers.
According to S3 Partners, Super Micro Computer has a "squeeze score" of 100, indicating its extreme vulnerability to short squeezes. Hims & Hers Health and Oklo also have high squeeze scores, hovering above 70.
The market has witnessed numerous forced liquidations by short sellers, a hallmark of healthy bull markets. As the market rally continues, overextended short sellers face increased risk of็ๅ.