Short interest in the S&P 500 rose slightly in Q1 2025, driven by tariff speculation. Super Micro Computer (SMCI) saw the largest increase in short positioning, while International Paper (IP) had the largest decrease due to its acquisition of DS Smith. These moves reflect evolving sentiment and float dynamics.

The S&P 500 Index (SPX) ended the first 3 months of 2025 down 256 points, or -4.37%.

SPX SI % Float increased by 16 basis points, from 2.51% to 2.67%, with shorts sizing up positions in February in anticipation of tariffs.

Drilling further into the underlying data we can find the biggest short interest movers.

Top 10 increases in SI % Float from the start to the end of Q1’25:

#1 mover, Super Micro Computer (SMCI) successfully avoided being delisted by the Nasdaq exchange due to previous delays in filing financial reports.

Despite the victory, analysts have expressed caution citing increased competition in the AI server market, and overly optimistic revenue expectations.

Short interest in terms of shares sold short, is currently sitting near all-time highs at 116 million leading into Q2.

Top 10 decreases in SI % Float from the start to the end of Q1’25:

#1 mover, International Paper (IP) is a result of the recent acquisition of UK-based DS Smith (SMDS LN) in an all-stock deal.

Post deal, IP free float increased from 342 shares to 519 shares with shorts covering 10 million shares over the first two weeks of February.

*It is imperative to check if an increase (or decrease) in Float - the denominator – has an effect on the specific SI % Float mover.

The first quarter of 2025 revealed strategic positioning by short sellers, particularly in SMCI and IP. SMCI's high short interest stems from AI market competition and float-based dynamics. IP's short interest drop follows structural float changes post-acquisition. Monitoring float adjustments is critical in interpreting short interest movements.

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