In this article, we will discuss the 12 Most Shorted Stocks in 2025.
Reuters reported that President Trump’s tariffs have impacted the broader stock markets, weighing on investors’ sentiments, as worries related to the economic slowdown drove a market sell-off which wiped out ~$4 trillion from the S&P 500’s peak last month, when the markets cheered Trump’s agenda. New Trump policies have resulted in increased uncertainty for businesses, consumers, and investors.
Average Short Interest Saw a Decline
Reuters, while highlighting the comments made by Peter Orszag (CEO of Lazard), mentioned that the uncertainty which is created by tariff wars regarding Canada, Mexico and Europe continues to prompt the top executives to reconsider the forward-looking strategies. Furthermore, while the tensions with China remain understandable, investors are confused with worries related to Canada, Mexico, and Europe. If this doesn’t get resolved over the next month or so, there can be real damage to the broader economic prospects of the US and M&A activity, says Orszag.
As per S&P Global’s long/short report (February 2025) dated February 14, the average short interest throughout US equities fell to 76 basis points over the month. However, short interest increased throughout several sectors during the period. That being said, Consumer Durables saw a 5-bps rise and REITs encountered a 4-bps increase. Notably, the largest decreases were seen throughout the Household and Personal Products sector (-7 bps), and the Consumer Services (-6 bps) sectors.
READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In.
Trends in US Short Selling
The US markets have reversed their January rally with a weak February, says Ihor Dusaniwsky (Managing Director of Predictive Analytics). On February 28, Dusaniwsky stated that markets are down for the year, with the Nasdaq index seeing the brunt of the sell-off. The US short sellers were down $45.8 billion (3.42%) in January mark-to-market losses. Notably, two-thirds of every dollar shorted in January remained unprofitable and only 33% were profitable. With markets trending downward, there has been an increase in short selling throughout most of the sectors in the US/Canadian markets, says Dusaniwsky. If the weakness in the market continues, there can be increased short selling.
Amidst these trends, let us now have a look at the 12 Most Shorted Stocks in 2025.
A portfolio manager analyzing a stock chart, seeking to find the right investments.
Our Methodology
To list the 12 Most Shorted Stocks in 2025, we used a screener and shortlisted the most shorted stocks. Next, we mentioned the hedge fund sentiment around each stock. Finally, the stocks are arranged in ascending order of their hedge fund holdings, as of Q4 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
12 Most Shorted Stocks in 2025
12. FuelCell Energy, Inc. (NASDAQ:FCEL)
Number of Hedge Fund Holders: 8
Short % of Shares Outstanding (as of February 28): ~22.9%
FuelCell Energy, Inc. (NASDAQ:FCEL) is engaged in manufacturing and selling stationary fuel cell and electrolysis platforms which decarbonize power and produce hydrogen. Analyst Jeff Osborne from TD Cowen maintained a “Hold” rating on the company’s stock, maintaining the price objective of $12.00. The rating is backed by a combination of factors, which include FuelCell Energy, Inc. (NASDAQ:FCEL)’s expected revenue growth and strategic partnerships, balanced against the financial challenges. The company anticipates a strong revenue boost in FY25, mainly because of GEE module shipments and contributions from the partnership with Diversified Energy, which is an important step in the data center power market.
Furthermore, FuelCell Energy, Inc. (NASDAQ:FCEL) narrowed its operating losses via cost reductions, and its backlog has expanded, hinting at the potential future growth. The company’s loss from operations came in at $(32.9) million in Q1 2025 as compared to $(42.5) million in Q1 2024. Elsewhere, KeyBanc Capital Markets maintained a “Sector Weight” rating on FuelCell Energy, Inc. (NASDAQ:FCEL)’s stock. As per the firm, FuelCell Energy, Inc. (NASDAQ:FCEL)’s effective expense management, higher product orders, and strict capital discipline can support it moving forward. The company’s emphasis on strategic partnerships and cost efficiency measures are some of the critical elements in its approach to achieve growth and financial stability.
11. Aehr Test Systems, Inc. (NASDAQ:AEHR)
Number of Hedge Fund Holders: 15
Short % of Shares Outstanding (as of February 28): ~24.1%
Aehr Test Systems, Inc. (NASDAQ:AEHR) specializes in semiconductor test and burn-in equipment, mainly for silicon carbide power semiconductors as well as memory devices. The company’s products support manufacturers in spotting defects and improve the reliability of semiconductors, which are utilized in EVs, data centers, 5G infrastructure, and industrial applications. Its Q2 2025 report consisted of key highlights, including the strategic expansion into AI processor and gallium nitride (GaN) markets. The company has secured the first AI processor customer for wafer level burn-in, using the new high-power FOX-XPTM solution for wafer level production test and burn-in of AI processors. Furthermore, Aehr Test Systems, Inc. (NASDAQ:AEHR)’s management is optimistic regarding the growth opportunities, thanks to advancements in AI, GaN, and data storage markets.
Aehr Test Systems, Inc. (NASDAQ:AEHR) also continues to expand its presence in the silicon carbide power semiconductor market, which is a critical sector for power conversion for EV traction inverters, charging infrastructure, and several industrial, data center, and infrastructure applications. The company remains well-placed in this market given its large customer base. Also, Aehr Test Systems, Inc. (NASDAQ:AEHR) is currently engaged in benchmarking efforts with multiple potential new silicon carbide customers globally, including in China. The company can capitalize on the higher demand for semiconductor reliability throughout various industries. Given its strong customer engagements and innovative solutions, it can achieve sustainable growth.
10. Arbor Realty Trust, Inc. (NYSE:ABR)
Number of Hedge Fund Holders: 18
Short % of Shares Outstanding (as of February 28): ~33.2%
Arbor Realty Trust, Inc. (NYSE:ABR) makes investment across the diversified portfolio of structured finance assets in the multifamily, single-family rental, and commercial real estate markets. The potential rate cuts by the US Fed can significantly benefit the company’s business, mainly in its agency lending segment. Reduced interest rates result in stimulating higher demand for real estate financing, as borrowers tend to seek advantage of more favorable terms. In the agency lending space, in which Arbor Realty Trust, Inc. (NYSE:ABR) has a robust presence, reduced rates can fuel a surge in refinancing activity and new loan originations.
This can lead to growth in its servicing portfolio. An expansion of the portfolio can offer Arbor Realty Trust, Inc. (NYSE:ABR) with a larger base of recurring revenue, mitigating the challenges in other segments. Furthermore, reduced rates can reignite activity in the bridge loan market. As property values stabilize or increase amidst the lower-rate environment, borrowers can be focused on pursuing value-add opportunities or new acquisitions, fueling demand for bridge financing. Arbor Realty Trust, Inc. (NYSE:ABR)’s fee-based servicing portfolio sat at $33.47 billion at December 31, 2024.
