The software crash has generated $24 billion for short-sellers so far this year

Group 1 - The tech sector has experienced a significant downturn in 2026, particularly affecting software stocks, resulting in a $24 billion gain for short-sellers [1][2] - Short-sellers have profited substantially over the last six weeks, with a report indicating billions in paper profits as they anticipated a decline in tech stocks [2] - U.S. software stocks have generated $24 billion in mark-to-market profit and loss (MTM PNL) for short-sellers year-to-date, while the sector's market capitalization has decreased by $1 trillion [3] Group 2 - S3 Partners highlighted that short-sellers have been increasingly betting against major software stocks, with Microsoft being a notable example due to changing short-seller behavior amid its decline [5][6] - Historically, Microsoft has shown a tendency for short-covering during downturns, but it is currently behaving like a distressed stock with increasing short positions [6] - Hedge funds are focusing on increasing short positions in large-cap tech stocks, with notable increases in short interest for AVGO and AMZN, which have seen declines of 10% and 15% respectively year-to-date [7]