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20h ago

Software Stocks Log Sixth Straight Drop as Shorts Pile In

Rising short interest with scarce dip‑buying signals a turn from AI euphoria to concern over structural disruption.

A trader works inside a booth on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., November 21, 2025. REUTERS/Brendan McDermid/File Photo

Overview

  • The S&P 500 software and services index extended losses on Wednesday after a broad selloff Tuesday, marking a sixth consecutive decline.
  • Short-sellers have realized roughly $24 billion in profits so far in 2026, S3 Partners estimates, as the IGV ETF fell 8% this week, more than 21% year to date, and about 30% from its September peak.
  • Options flow skewed defensive in software-linked ETFs such as IGV and ARKK, and Interactive Brokers reported limited client interest in buying dips.
  • Microsoft’s short interest increased about 20% over the past week, while large software names including Oracle, Salesforce, Adobe and ServiceNow have posted double‑digit year‑to‑date declines.
  • S3 data show heavy short interest in TeraWulf (>35% of float), Asana (25%), Dropbox (19%) and Cipher Mining (17%), while a banker reported revolvers largely undrawn and upcoming earnings could test sentiment.