Last year, the bears came out of hibernation.
There were 166 short-selling campaigns launched in 2025, according to industry tracker Diligent Market Intelligence — a 55% bump compared to 2024. The vast majority were based in the US.
The most targeted companies were technology stocks that had been boosted by market-wide optimism about artificial intelligence, Josh Black, the author of Diligent’s report, told Business Insider. The report identified Applovin, a company that helps iPhone apps monetize users via advertising technology, as an example of a common short. The company’s stock is down nearly 40% this year.
The spike in short-selling campaigns may be a sign of pain to come in 2026. In 2021, one year before a global market plunge brought on in part by concerns over lofty tech valuations, there were 128 campaigns — the most in the last five years until 2025.
Of last year’s 166 campaigns, 55 of them were focused on technology companies, by far the most of any sector.
The slide in software stocks such as Salesforce and Oracle this year has added fuel to short-sellers’ questions about the industry’s valuations in the age of AI.
New shortseller BMF Capital, run by Frankie Gerola and based in Arizona, told Diligent that one of the firm’s first bets, against defense AI company BigBear.ai, came about in part due to what it viewed as a “lack of true AI innovation.” BigBear, which has attracted other short sellers, did not immediately respond to a request for comment on the short-sellers’ critiques.
BMF Capital is also keeping an eye on companies “that repeatedly change narratives in search of relevance, such as a sports company pivoting into AI dating.”
“That kind of identity drift usually precedes capital stress or poor fundamentals,” BMF Capital said.
Last year, the average short campaign generated returns of 7.2% 30 days after launch, according to Diligent. So far in 2026, the software-stock crash has generated billions for those betting against the stocks, short-seller tracker S3 Partners said.