Stock market short sellers have had a rough start to 2025, with losses totaling $73 billion in the US and Canadian markets, according to data from S3 Partners. The market rally has caught many short sellers off guard, leading to significant losses as stock prices continue to rise. The S&P 500 has seen a 4% increase since the beginning of the year, with some individual companies experiencing even greater gains.
One such stock that has seen a massive increase is Super Micro Computer (SMCI), which has surged more than 110% since the start of 2025. Short sellers betting against SMCI have lost over $2.2 billion as the stock price continues to climb. Short squeezes, where investors who have bet against a stock are forced to buy shares to cover their positions, have been a significant factor in driving up stock prices.
The meme stock mania of 2021, exemplified by GameStop’s dramatic rise, was fueled by short squeezes. When short sellers are squeezed, they are forced to buy back shares, leading to further price increases. All Star Charts chief markets strategist JC Parets noted that short sellers can become forced buyers during a squeeze, adding to the upward pressure on stock prices.
Stocks with high “squeeze scores” are particularly susceptible to short squeezes, with a score above 70 indicating vulnerability and a score of 90 signaling extreme susceptibility. Super Micro Computer currently has a squeeze score of 100, making it a prime target for short squeezes. Other stocks like Hims & Hers Health (HIMS), Oklo (OKLO), and BigBear.ai (BBAI) have also seen significant gains due to short squeezes.
Hims & Hers Health saw a 22% increase in stock price after announcing plans to introduce at-home lab testing through its platform. Short sellers betting against the stock have lost nearly $2 billion. As more stocks and sectors participate in the bull market, short sellers who have overstayed their welcome are facing significant losses.
Overall, the market environment is characterized by healthy bull market conditions, with short sellers feeling the pressure as stock prices continue to rise. The dynamics of short squeezes are playing a key role in driving up stock prices, leading to significant losses for those betting against the market.
