Hedge funds made $24 billion shorting software stocks so far in 2026 — And they are increasing the bet

Core Viewpoint - Hedge funds are significantly increasing their short positions against software stocks, leading to a substantial decline in the sector, with a total market value loss of $1 trillion this year [1][3]. Group 1: Hedge Fund Activity - Hedge funds have realized a $24 billion profit from shorting software stocks in 2026 [1]. - Analysts indicate that hedge funds are currently net short on software stocks, reflecting a bearish sentiment in the industry [4]. Group 2: Market Performance - The iShares Expanded Tech-Software ETF (IGV) has experienced an 8% drop this week, contributing to a year-to-date loss exceeding 21% [3]. - Since reaching its all-time high in September of the previous year, the ETF has declined by 30% [3]. Group 3: Focus of Short Selling - The primary targets for short selling are companies offering basic automation services that can be easily replicated by emerging AI technologies [2].