Tech Sector Short Selling May 2022 Recap
Author:
Ihor Dusaniwsky
Managing Director of Predictive Analytics, S3 Partners
Matthew Unterman
Director of Predictive Analytics, S3 Partners
The most shorted sector in the U.S. domestic market is the Information Technology sector, making up almost $1 out of every $5 shorted. The Tech sector also had the greatest drop in short interest in the second quarter, with short interest declining by $42.7 billion. This decline was made up of $1.2 billion of short covering and $41.5 billion of mark-to-market deceases in the process of the shorted stocks. This price weakness generated a +20.78% mark-to-market second quarter profit for the sector, the most profitable U.S. domestic sector on the short side in the second quarter.
Change in Short Interest by Sector
Sector
3-31 Short Interest
5-17 Short Interest
Change Short Interest
2nd Quarter
MTM P/L
P/L%
Communication Services
$89,967
$76,538
($13,429)
$14,014
16.83%
Consumer Discretionary
$179,808
$146,977
($32,831)
$32,404
19.83%
Consumer Staples
$44,403
$45,470
$1,068
$766
1.70%
Energy
$66,956
$69,791
$2,835
($3,393)
-4.96%
Financials
$121,801
$107,335
($14,466)
$14,607
12.75%
Health Care
$138,257
$117,397
($20,860)
$18,548
14.51%
Industrials
$103,233
$88,672
($14,561)
$12,254
12.77%
Information Technology
$220,402
$177,687
($42,715)
$41,362
20.78%
Materials
$43,149
$37,919
($5,230)
$4,401
10.86%
Misc. (primarily SPACs)
$670
$667
($2)
$60
9.02%
Real Estate
$43,702
$37,968
($5,734)
$4,325
10.59%
Utilities
$23,398
$22,452
($946)
$636
2.78%
Grand Total
$1,075,745
$928,873
($146,872)
$139,986
13.97%
The most shorted industries in the Tech sector are Software (MSFT $10.26 bn, PANW $3.68 bn, ADBE $2.28 bn); Semiconductor & Semiconductor Equipment (NVDA $5.09 bn, AMD $2.84 bn, AVGO $2.60 bn) and IT Services (V $5.43 bn, SQ $3.67 bn, IBM $2.79 bn).
Short Interest in Technology by Industry
Technology - Industry
3-31 Short Interest
5-17 Short Interest
Change Short Interest
2nd Quarter MTM P/L
P/L%
Communications Equipment
$6,572
$5,694
($877)
$807
13.16%
Electronic Equipment Instruments & Components
$9,361
$8,861
($500)
$726
7.97%
IT Services
$49,429
$38,051
($11,378)
$11,225
25.66%
Semiconductors & Semiconductor Equipment
$47,279
$40,905
($6,374)
$6,417
14.55%
Software
$82,286
$61,650
($20,636)
$19,139
26.59%
Technology Hardware Storage & Peripherals
$25,476
$22,525
($2,950)
$3,047
12.70%
Grand Total
$220,402
$177,687
($42,715)
$41,362
20.78%
Total short interest in the Tech sector is $177.7 billion, 4.15% SI % Float, 3.75% S3 SI % Float and a 0.52% average stock borrow fee. Apple Inc. (AAPL) and Microsoft Corp. (MSFT) continue to be the two largest short in the Tech sector.
Short Interest in Technology by Stock (as of 05.17.22)
#
Name
Ticker
SI % Float
S3 SI % Float
Fee
Short Interest
1
APPLE INC
AAPL
0.64%
0.64%
0.30%
$15,508,452,196
2
MICROSOFT CORP
MSFT
0.52%
0.52%
0.30%
$10,259,570,263
3
VISA INC
V
1.62%
1.60%
0.30%
$5,432,816,004
4
NVIDIA CORP
NVDA
1.16%
1.15%
0.30%
$5,088,377,992
5
PALO ALTO NETWORKS INC
PANW
8.09%
7.49%
0.30%
$3,683,034,197
6
BLOCK INC
SQ
8.49%
7.82%
0.30%
$3,672,483,070
7
ADVANCED MICRO DEVICES
AMD
1.72%
1.69%
0.30%
$2,840,079,834
8
IBM CORP
IBM
2.24%
2.19%
0.30%
$2,787,884,987
9
BROADCOM INC
AVGO
1.07%
1.06%
0.30%
$2,598,148,160
10
QUALCOMM INC
QCOM
1.53%
1.50%
0.30%
$2,384,692,970
11
TEXAS INSTRUMENTS
TXN
1.42%
1.40%
0.30%
$2,290,123,017
12
ADOBE SYSTEMS INC
ADBE
1.18%
1.17%
0.30%
$2,281,086,048
13
HP INC
HPQ
5.45%
5.17%
0.30%
$2,271,935,365
14
INTEL CORP
INTC
1.20%
1.19%
0.30%
$2,180,858,647
15
MICRON TECHNOLOGY
MU
2.31%
2.26%
0.30%
$1,912,897,398
16
CROWDSTRIKE HOLDINGS
CRWD
6.30%
5.92%
0.30%
$1,911,338,393
17
SHOPIFY INC
SHOP
4.44%
4.25%
0.30%
$1,880,146,177
18
TAIWAN SEMICONDUCTOR ADR
TSM
0.37%
0.37%
0.30%
$1,807,768,558
19
SALESFORCE.COM INC
CRM
1.15%
1.14%
0.30%
$1,806,280,985
20
PAYPAL HLDGS INC
PYPL
1.93%
1.89%
0.30%
$1,775,834,959
Total Tech Short Interest
-
4.15%
3.75%
0.52%
$177,687,251,406
Over the last thirty days we saw increased short selling in the Semiconductor (NVDA, NXPI & MU), Semiconductor Equipment (AMAT & CCMP) and Systems Software (MSFT & PANW) sub-industries and short covering in the Application Software (CRM, ADBE & INTU), Data Processing & Outsourced Services (FISV & SQ) and Technology Hardware Storage & Peripherals (HPQ & HPE) sub-industries.
30 Day Change in Shares Shorted (as of 05.17.22)
#
Name
Ticker
SI % Float
S3 SI % Float
Short Interest
30D Change Shares Shorted
1
MICROSOFT CORP
MSFT
0.52%
0.52%
$10,259,570,263
$766,644,300
2
APPLIED MATERIALS INC
AMAT
1.45%
1.43%
$1,493,205,853
$560,937,156
3
NVIDIA CORP
NVDA
1.16%
1.15%
$5,088,377,992
$416,009,406
4
NXP SEMICONDUCTORS NV
NXPI
2.77%
2.70%
$1,348,741,371
$345,370,166
5
MICRON TECHNOLOGY
MU
2.31%
2.26%
$1,912,897,398
$330,407,729
6
SHOPIFY INC
SHOP
4.44%
4.25%
$1,880,146,177
$242,482,065
7
CDK GLOBAL INC
CDK
5.94%
5.61%
$372,838,695
$193,831,063
8
SEAGATE TECHNOLOGY HOLDINGS
STX
3.40%
3.29%
$634,003,949
$128,189,338
9
UNITY SOFTWARE INC
U
7.69%
7.14%
$542,376,679
$127,650,582
10
VISA INC
V
1.62%
1.60%
$5,432,816,004
$109,505,364
#
Name
Ticker
SI % Float
S3 SI % Float
Short Interest
30D Change Shares Shorted
1
SALESFORCE.COM INC
CRM
1.15%
1.14%
$1,806,280,985
($542,091,856)
2
ADOBE SYSTEMS INC
ADBE
1.18%
1.17%
$2,281,086,048
($481,537,430)
3
HP INC
HPQ
5.45%
5.17%
$2,271,935,365
($476,516,951)
4
INTEL CORP
INTC
1.20%
1.19%
$2,180,858,647
($287,820,380)
5
ACCENTURE PLC
ACN
0.52%
0.52%
$959,002,009
($238,182,872)
6
TEXAS INSTRUMENTS
TXN
1.42%
1.40%
$2,290,123,017
($233,633,296)
7
FISERV INC
FISV
1.45%
1.43%
$856,451,112
($226,715,731)
8
INTUIT INC
INTU
0.74%
0.73%
$753,195,538
($203,642,706)
9
WORKDAY INC
WDAY
4.03%
3.88%
$1,355,592,990
($194,526,655)
10
AKAMAI TECHNOLOGIES
AKAM
7.37%
6.87%
$1,142,320,396
($175,647,009)
Short selling in the Tech sector was a very profitable trade in 2022, with sector shorts up $74.6 billion in year-to-date mark-to-market profits, up +33.91% for the year. The most profitable sub-industries in the Tech sector are Internet Services & Infrastructure (SHOP & MDB) +74.31% for the year and Application Software (CRM) +51.61% for the year. There were no sub-industries with a mark-to-market loss for the year.
The Most Profitable Tech Shorts (Year-to-date through 05.17.22)
#
Name
Ticker
Avg Short Interest
YTD MTM P\L $
P\L %
1
BLOCK INC
SQ
$5,254,565,925
$3,391,758,804
64.55%
2
NVIDIA CORP
NVDA
$6,169,347,775
$2,983,781,538
48.36%
3
SHOPIFY INC
SHOP
$2,217,735,940
$2,891,613,973
130.39%
4
APPLE INC
AAPL
$16,993,784,293
$2,851,901,425
16.78%
5
MICROSOFT CORP
MSFT
$11,276,589,817
$2,652,908,475
23.53%
6
ADVANCED MICRO DEVICES
AMD
$5,408,182,246
$2,422,920,711
44.80%
7
PAYPAL HLDGS INC
PYPL
$2,459,172,996
$2,064,520,481
83.95%
8
MONGODB INC
MDB
$1,620,497,869
$1,236,519,722
76.30%
9
SALESFORCE.COM INC
CRM
$2,782,630,898
$1,195,228,915
42.95%
10
ZSCALER INC
ZS
$1,400,509,450
$1,150,743,885
82.17%
The Least Profitable Tech Shorts (Year-to-date through 05.17.22)
#
Name
Ticker
Avg Short Interest
YTD MTM P\L $
P\L %
1
ANAPLAN INC
PLAN
$565,938,414
($164,169,260)
-29.01%
2
SAILPOINT TECHNOLOGIES HLDGS
SAIL
$442,339,302
($143,700,504)
-32.49%
3
HP INC
HPQ
$1,923,931,388
($135,729,246)
-7.05%
4
CLEAR SECURE INC
YOU
$181,278,896
($73,625,976)
-40.61%
5
MANDIANT INC
MNDT
$438,042,488
($56,195,860)
-12.83%
6
GLOBALFOUNDRIES INC
GFS
$567,407,403
($55,513,126)
-9.78%
7
JACK HENRY & ASSOC INC
JKHY
$442,643,875
($47,962,948)
-10.84%
8
CHECK POINT SOFTWARE
CHKP
$542,062,143
($47,807,520)
-8.82%
9
PLANTRONICS INC
POLY
$127,582,545
($44,160,131)
-34.61%
10
IBM CORP
IBM
$3,097,234,829
($42,929,173)
-1.39%
In May, the two most profitable sub-industries in the Tech sector continued to be Internet Services & Infrastructure (MDB & NET) +37.02%, and Application Software (BILL & U) +22.94%. The two least profitable sectors are Technology Distributors (ARU & AVT) -6.25%, and Electronic Manufacturing Services (IPGP & TEL) -4.92%.
For the month, shorts are up +$10.72 billion in month-to-date mark-to-market profits, up +5.82% on an average short interest of $184.3 billion.
The Most Profitable Tech Shorts (Month-to-date through 05.17.22)
#
Name
Ticker
Avg Short Interest
May MTM P\L $
P\L %
1
APPLE INC
AAPL
$15,995,594,582
$882,836,747
5.52%
2
PALO ALTO NETWORKS INC
PANW
$3,966,033,484
$686,443,326
17.31%
3
CROWDSTRIKE HOLDINGS
CRWD
$2,175,829,270
$658,939,334
30.28%
4
BLOCK INC
SQ
$3,930,669,434
$642,300,727
16.34%
5
MONGODB INC
MDB
$1,181,257,162
$429,232,356
36.34%
6
MICROSOFT CORP
MSFT
$10,687,703,235
$425,025,924
3.98%
7
BILL.COM HOLDINGS INC
BILL
$854,362,397
$401,044,557
46.94%
8
CLOUDFLARE INC
NET
$872,521,645
$372,197,965
42.66%
9
UNITY SOFTWARE INC
U
$694,941,006
$366,541,188
52.74%
10
ZSCALER INC
ZS
$917,323,073
$331,999,333
36.19%
The Least Profitable Tech Shorts (Month-to-date through 05.17.22)
#
Name
Ticker
Avg Short Interest
May MTM P\L $
P\L %
1
ADVANCED MICRO DEVICES
AMD
$2,863,241,804
($452,890,180)
-15.82%
2
BROADCOM INC
AVGO
$2,489,715,038
($230,916,352)
-9.27%
3
HP INC
HPQ
$2,164,004,298
($168,686,463)
-7.80%
4
MICRON TECHNOLOGY
MU
$1,808,779,248
($162,193,482)
-8.97%
5
IBM CORP
IBM
$2,835,252,371
($126,879,595)
-4.48%
6
NXP SEMICONDUCTORS NV
NXPI
$1,247,786,704
($102,429,769)
-8.21%
7
ON SEMICONDUCTOR
ON
$782,464,510
($90,511,472)
-11.57%
8
II-VI INC
IIVI
$1,265,879,434
($78,436,385)
-6.20%
9
APPLIED MATERIALS INC
AMAT
$1,446,087,159
($76,679,622)
-5.30%
10
ADOBE SYSTEMS INC
ADBE
$2,306,813,564
($75,234,529)
-3.26%
The definition of a “crowded” short trade varies from investor to investor but there are several themes that remain constant. A short can be considered “crowded” if some or all of the following occur: there are large amount of dollars at risk on the short side, a substantial proportion of a stock’s float is being shorted, there is illiquidity in the stock loan market and\or there is illiquidity in the trading market.
The Most Crowded Shorts in Tech (as of 05.17.22)
Name
Ticker
Short Interest
S3 Crowded Score
HASHICORP INC
HCP
$344,500,333
92.50
MICROVISION INC
MVIS
$137,188,240
90.00
META MATERIALS INC
MMAT
$90,714,520
85.00
SAMSARA INC
IOT
$93,723,271
80.00
MONDAY.COM LTD
MNDY
$425,443,098
80.00
II-VI INC
IIVI
$1,314,412,489
77.50
SHIFT4 PAYMENTS INC
FOUR
$578,466,451
75.00
CS DISCO INC
LAW
$104,688,350
75.00
PAR TECHNOLOGY
PAR
$195,321,075
72.50
ATOMERA INC
ATOM
$50,587,161
72.50
MICROSTRATEGY INC
MSTR
$517,370,102
72.50
C3.AI INC
AI
$295,274,418
70.00
CORSAIR GAMING INC
CRSR
$113,702,736
70.00
Not every Crowded stock is a Squeeze candidate. By overlaying our Squeeze algorithm over our Crowded Score, we can determine which U.S. traded stocks have the highest potential for a Squeeze, and which do not. The following stocks have earned our highest Squeeze Scores in the Technology sector, which does not mean a Squeeze will definitely occur, but means that if the present trends continue, there is a better chance for a Squeeze.
Tech Stocks Most at Risk of a Short Squeeze (as of 05.17.22)
Name
Ticker
Short Interest
S3 Squeeze Score
MICROVISION INC
MVIS
$137,188,240
100.00
META MATERIALS INC
MMAT
$90,714,520
100.00
CLEAR SECURE INC
YOU
$292,350,051
100.00
PAR TECHNOLOGY
PAR
$195,321,075
92.50
II-VI INC
IIVI
$1,314,412,489
87.50
EXPENSIFY INC
EXFY
$69,940,334
85.00
HASHICORP INC
HCP
$344,500,333
82.50
ATOMERA INC
ATOM
$50,587,161
82.50
SAMSARA INC
IOT
$93,723,271
80.00
C3.AI INC
AI
$295,274,418
80.00
HIMAX TECHNOLOGIES INC ADR
HIMX
$225,249,613
80.00
EBIX INC
EBIX
$117,640,531
80.00
