Tech stocks dominate squeeze candidates (2/3 of names) with high squeeze scores, despite representing only 13% of the broader market.

High scores are fueled by extreme April returns (XLK +20%) rather than massive shorting; this rapid "AI bubble" growth has left shorts with losses.

Short interest is up in almost all names, with a few exceptions, ruling out the possibility that squeezes have occurred. Most tech is primed for a squeeze.

Approximately two-thirds of the names currently carrying high short squeeze risk are in the Technology sector, even though tech constitutes only 13% of the names in our broader universe. While the average crowded trade sentiment score sits at a modest 43, the short squeeze score is hitting an average of 85.

Real-time short interest has climbed by approximately 10% (or 0.50% in absolute terms). However, the primary catalyst driving these scores is not the size of the short position itself, but rather the speed of recent returns. The XLK is up 20% in April—marking its second-best monthly performance on record—while the S&P 500 has gained 10%.

This surge represents a snap-back from geopolitical tensions combined with a relentless continuation of the AI bubble; essentially, the market packed two months of returns into one.

We previously wrote about the Semiconductor sector, but that is only a small part of the broader story.

The general pattern we are seeing is "shorting on the way up." This isn't necessarily a targeted strike on specific underperformers; rather, names across the sector are being shorted with equal fervor.

Because short interest has increased across almost all names, we have seen few realized squeezes thus far. The notable exceptions are STX, WDC, and DELL. Everything else remains a potential short squeeze risk, a coiled spring that would require a meaningful decrease in short interest to trigger.

Many tech stocks are currently positioned for this exact scenario. Think of it like a tide: if the tech sector sells off, the pressure eases and these squeeze scores will dissipate. Conversely, if the rally continues, the rising tide will lift all high squeeze score stocks together.

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