Short interest in IT stocks reaches 13-month high in January

Short sellers increased their bets against North American IT stocks in January as companies gear up to spend record amounts in 2026 to scale their AI operations.

The average short interest in the North American IT sector stood at 6.44% of shares outstanding at the end of January, its highest level in the past 13 months, according to S&P Global Market Intelligence data.

By comparison, short interest in IT stocks was 6.29% at the end of December 2025 and 4.99% at the end of January 2025.

Overall, the IT sector ranked third among S&P 500 sectors by short interest as of the end of the month.

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Within the IT sector, the technology hardware, storage and peripherals segment was the most shorted at the end of January 2026, at 8.56%, up from 8.26% in December 2025.

Electronic equipment and instruments stocks ranked second, at 7.62% short interest, a jump from 7.46% in the previous month. Electronic component stocks were the least-shorted IT stocks during the month.

SoundHound AI Inc., which specializes in voice technology for smart assistants, was the most shorted IT stock at the end of January. The company had just over 123.4 million shares sold short, or 31.84% of its approximately 387.6 million shares outstanding.

In January, SoundHound unveiled its Amelia 7 agentic AI platform for vehicles at the CES 2026 annual trade show. The company also struck several partnerships during the month, including an agreement with TomTom NV to deliver a unified, conversational in-car navigation experience for automakers.

SoundHound also entered into collaborations with Bridgepointe Technologies LLC to expand the adoption of its AI agent and IT automation platforms and with Five Guys Enterprises LLC for the deployment of its AI-powered restaurant ordering technology.

CleanSpark Inc. was the second most shorted IT stock in January with 31.68% short interest. This equated to over 81.0 million shares sold short out of 255.8 million shares outstanding.

For the quarter ended Dec. 31, 2025, CleanSpark swung to a net loss of $378.7 million, or $1.35 per share, compared with attributable net income of $241.8 million, or 83 cents per share in the year-earlier period. The S&P Capital IQ consensus estimate was a loss of 25 cents per share on a GAAP basis.

CleanSpark's revenue increased year over year in the first quarter to $181.2 million from $162.3 million, missing the consensus estimate of $187.3 million.

On a Feb. 5 earnings call, CleanSpark CFO Gary Vecchiarelli attributed the shortfall to rising network difficulty and softer bitcoin prices.

In its January operational update, the bitcoin mining company said it produced 573 bitcoin during the month and expanded its AI data center team while growing its land and power portfolio in Texas to support up to 600 megawatts of transmission-level capacity.

Applied Digital Corp. was the third most shorted IT stock at the end of January, with nearly 86.6 million shares sold short, for short interest of 30.97%.

On Jan. 7, Applied Digital reported fiscal second-quarter net loss attributable to common stockholder of $19.1 million, or 7 cents per share, compared with a net loss of $139.4 million, or 66 cents per share, a year earlier. The consensus GAAP estimate was a loss of 12 cents per share for the quarter.

Revenue rose year over year to $126.6 million for the quarter, exceeding the consensus estimate of about $81.2 million.

During the month, the company also said it broke ground on Delta Forge 1, an AI Factory campus in a southern US market.

SoundHound, CleanSpark and Applied Digital did not respond to requests for comment.