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It’s a complicated time for financial markets, with both the Dow Jones Industrial Average and the S&P 500 index mostly trending downward. The combination of poor growth readings and recurring inflation is still pulling markets down as this week winds to a close.
Most members of the group of prominent tech stocks known as the Magnificent 7 have lost considerable momentum, casting uncertainty over the U.S. economy.
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Popular tech stock Palantir Technologies (PLTR) recently dipped on news that the Pentagon is planning on reducing the United States’ federal defense budget. Additionally, the recent artificial intelligence (AI) chip stock selloff sparked by Chinese AI startup DeepSeek may still be making some investors nervous.
Despite these unsettling market conditions, experts remain mostly optimistic about the prominent tech stocks that are often quick to rebound. But recent data shows that short sellers are targeting some of the sector’s biggest names.
A list of shortside crowdedness shows some surprising names
When a conversation turns to the best stocks to bet against, most investors don’t think of popular tech leaders. After all, companies that lead the high-growth industry have a proven history of rising above market volatility, even in uncertain times.
However, one market research firm recently published a report on the most crowded shorted securities in the large, mid and small-cap ranges for January 2025. Hazeltree's new Shortside Crowdedness Report shows some unexpected names on the list of short-seller favorites.
Related: Analyst who predicted Palantir rally picks best AI software stocks
The company states that each list is “compiled from Hazeltree’s proprietary securities finance platform data, which tracks approximately 15,000 global equities across the Americas, EMEA, and APAC.” This recently updated list included names such as Apple (AAPL) , server technology company Super Micro Computer (SMCI) and business intelligence software producer MicroStrategy (MSTR) .
These names may seem surprising, as Apple is one of the tech sector’s most prominent companies and has enjoyed a year of mostly steady growth, rising 34%. However, MicroStrategy stock has surged by more than 340%, partially due to its high Bitcoin exposure.
And while SMCI stock has been fairly volatile, it has performed extremely well recently, rising 86% since the year began.
“The tech sector continued to ride a wave of investor enthusiasm from December, which included short-sellers who gravitated to large-cap security names such as Apple and Super Micro,” states Tim Smith, Hazeltree’s Managing Director of Data Insights.