Tech Stocks Soar as Short Sellers Retract, Average Short Interest in Tech Sector Drops to 1.89%

The tech sector's average short interest in the S&P 500 dropped to 1.89% in June, down from 3.17% in May. This decrease in bearish bets coincides with a 9% rise in tech stocks this year. Giants like Apple, Microsoft, and Nvidia saw minimal short-selling, while names like Enphase Energy, Super Micro Computer, and First Solar saw a decrease in bearish wagers. However, the IT Services sector saw a small increase in bearish positioning, indicating some areas of tech still concern traders.

The tech sector's average short interest in the S&P 500 dropped to 1.89% in June, down from 3.17% in May. This decrease in bearish bets coincides with a 9% rise in tech stocks this year. Giants like Apple, Microsoft, and Nvidia saw minimal short-selling, while names like Enphase Energy, Super Micro Computer, and First Solar saw a decrease in bearish wagers. However, the IT Services sector saw a small increase in bearish positioning, indicating some areas of tech still concern traders.

According to Wedbush Securities, the tech sector is expected to have a strong second quarter earnings season, with cloud and AI spending being key drivers. Analysts led by Daniel Ives believe that tech stocks will have a very strong second half of the year, driven by the "AI Revolution tailwinds" [1].

Tesla (NASDAQ:TSLA) ranks among the three most shorted U.S. auto stocks heading into the second-quarter earnings season, alongside Rivian (NASDAQ:RIVN) and QuantumScape Corp (NYSE:QS) [2]. The IT Services sector's slight increase in bearish positioning may be due to concerns about the potential impact of AI on traditional IT services.

Sylebra Capital, a hedge fund founded by former Coatue Management partner Daniel Gibson, gained 16.7% in the first half of this year, fueled by long bets on tech stocks. The firm has long positions on about 35 stocks and short bets on roughly 100 others, with a more short exposure than most Tiger Cubs [3].

References:
[1] https://seekingalpha.com/news/4467808-tech-sector-likely-to-see-strong-q2-earnings-season-ai-and-cloud-spending-key-drivers-wedbush
[2] https://ca.finance.yahoo.com/news/tesla-one-three-most-shorted-111611496.html
[3] https://www.bloomberg.com/news/articles/2025-07-14/ex-coatue-trader-s-long-bets-on-tech-fuel-16-7-first-half-gain