Short sellers are nursing steep losses in 2026, down more than $200 billion collectively, yet many keep piling into one trade: betting against AI leaders, according to data from S3 Partners.

SpaceX (NASDAQ:SPCX), has emerged as the most contested target in that trade. Bears have wagered more than $26 billion against Elon Musk‘s rocket and AI company, representing roughly 35% of SpaceX’s entire tradable float, even though it amounts to a small slice of the company’s $1.5 trillion market capitalization, per S3 Partners.

Shorting Elon Musk 

Traders wagering against SpaceX have pocketed nearly $7.3 billion in mark-to-market profits since the company’s record-breaking IPO last month, making it the second most profitable short target of the year behind Tesla Inc. (NASDAQ:TSLA), whose shorts are up almost $9.1 billion.

“We’ve seen continued SPCX short selling since its inception,” S3 Partners managing director Ihor Dusaniwsky said.

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The skepticism has persisted even as SpaceX secured fast-track inclusion on the Nasdaq 100 and other major indexes, a move that required Nasdaq, FTSE Russell and CRSP to adjust their rules ahead of the offering. 

Two key catalysts are ahead: SpaceX reports quarterly earnings on Aug. 4, followed two days later by its first lockup expiry, when early pre-IPO shareholders become eligible to sell. The stock has already fallen nearly 15% from its listing price, and the lockup could inject fresh volatility.

Musk has pushed back hard against the bearish crowd. He warned on social media that “the survival probability of firms who maintain a significant short position in SpaceX over time is very low.” 

The comment echoes his long-running feud with Tesla shorts, including his 2018 warning that bears had “about three weeks before their short position explodes” and his 2024 claim that short holders “will be obliterated” once Tesla reaches full autonomy at scale, a jab he once aimed directly at Bill Gates.

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Shorting the Hyperscalers 

SpaceX is not the only AI-adjacent name drawing bearish attention. Hyperscalers Alphabet Inc. (NASDAQ:GOOGL), Amazon.com Inc. (NASDAQ:AMZN) and Microsoft Corp. (NASDAQ:MSFT), along with chipmakers Broadcom Inc. (NASDAQ:AVGO), Micron Technology Inc. (NASDAQ:MU) and Nvidia Corp. (NASDAQ:NVDA), all rank among the year’s ten most shorted stocks, per S3 Partners. 

The growing bearish bets add another layer of pressure on a sector already facing scrutiny over its massive AI spending.

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