While the Nasdaq is cap-weighted by mega-caps, the healthcare sector is most crowded and accounts for 1/3 of its companies and 2/3 of all stocks with squeeze scores over 70.

With an $11B market cap and a crowded score of 78, Madrigal Pharma (MDGL) has a squeeze score of 100 due to the short interest around 18% and the recent 25% rally.

With a 14% short interest and a market cap of $12B, BridgeBio (BBIO) recently saw its squeeze score hit 80. driven by takeover rumors and positive Phase 3 data.

Where the Nasdaq Composite index is cap-weighted with the mega-caps dominating, counting individual companies reveals a vastly different landscape.

Roughly one-third of these companies are consumer non-cyclical, encompassing healthcare, pharmaceutical, and biotech firms.

At the same time, the short interest, short squeeze risk, and crowded shorts data scores are highest in this sector. It turns out that almost two-thirds of all companies with a short squeeze score over 70 are healthcare stocks.

This situation is poised to intensify if the sector rallies.

In terms of S&P 500 companies, only Moderna (MRNA) in healthcare presents significant short squeeze risk.

The largest individual case is Madrigal Pharmaceuticals (MDGL) at $11B, carrying a short squeeze score of 100 and a short interest % of float of 18.38%.

The crowded shorts data score is at 78, well above the 70 threshold, so the short squeeze risk is anchored there and escalates when the stock rallies.

The short interest has been rangebound between 17 and 20%. The stock has rallied 25% causing the squeeze score to go to 100.

The reasons for this rally include rumors of a buyout, higher revenue, and an expanded pipeline. On the short side, bearish short selling sentiment data highlights consistent losses, expensive product launches, new tariffs on drug makers, and a steep valuation of $12B against $1B in annual losses.

The largest Biotech entry is BridgeBio Pharma (BBIO) at $12B, with a crowded shorts data score of 65 and a 14% short interest. The stock has rallied recently, and the short squeeze score reached as high as 80. The recent rally also involves takeover potential, new data on a cardio drug, and success in two clinical drug trials.

Want to know more? Access this data in real time using S3’s BLACK APP & BLACK MAP

The information herein (some of which has been obtained from third party sources without verification) is believed by S3 Partners, LLC (“S3 Partners”) to be reliable and accurate. Neither S3 Partners nor any of its affiliates makes any representation as to the accuracy or completeness of the information herein or accepts liability arising from its use. Prior to making any decisions based on the information herein, you should determine, without reliance upon S3 Partners, the economic risks, and merits, as well as the legal, tax, accounting, and investment consequences, of such decisions.