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Investors were heavily shorting technology stocks in September, two in particular – International Business Machines, or IBM (NYSE: IBM) and Palo Alto Networks (Nasdaq: PANW).

IBM was the most shorted large cap stock last month, according to the latest edition of the Hazeltree Shortside Crowdedness Report. IBM had a crowdedness score of 99, meaning it had the highest percentage of institutional investors shorting it.

Palo Alto Networks, an enterprise cybersecurity provider, was second among large caps with a score of 96.

Both of these stocks have performed well this year, with IBM up 31% and Palo Alto Networks up 18%. But their valuations have also risen, with IBM trading at 46 times earnings and Palo Alto Networks trading at 130 times earnings.

Two other major technology companies made Hazeltree’s top 10 – ON Semiconductor (Nasdaq: ON) and Applied Materials (Nasdaq: AMAT), which makes equipment for semiconductors. They both had scores of 90.

• IBM (IBM): 99
• Palo Alto Networks (PANW): 96
• Live Nation (LYV): 93
• Air Products and Chemicals (APD): 93
• Marriott International (MAR): 93
• ON Semiconductor (ON): 93
• SPDR S&P 500 ETF (SPY): 93
• Applied Materials (AMAT): 93
• Charter Communications (CHTR): 90
• Hims and Hers (HIMS): 90

Hims and Hers had an institutional supply utilization score of 54, which was the highest among large caps. That represents the percentage of supply of a particular security that is being lent out, indicating how “hot” a security is in terms of supply-demand.

Supermicro exits the list

While technology names dominated the top 10, there was one notable exception in September – Super Micro Computer (Nasdaq: SMCI). The server provider for data centers had been among the most shorted large caps for the past nine straight months. The stock is up 90% YTD and has a P/E ratio of 31.

It is also worth noting that the SPDR S&P 500 ETF remains in the top 10 for the second straight month. This could be indicative of a short-term bearish sentiment, or it could be because the ETF is being utilized as a hedging tool.

September showed broadly positive developments—easing-rate hopes and resilient earnings,” Tim Smith, managing director, data insights, at Hazeltree, said. “In the Americas, investor optimism returned amid expectations for 2026 rate cuts and ongoing AI enthusiasm.”

The most shorted mid cap stock in September was Oscar Health (NYSE: OSCR), with a score of 99. E.L.F. Beauty (NYSE: ELF) was second with a score of 96.

Among U.S. small cap stocks, TripAdvisor (Nasdaq: TRIP) was the most shorted in September with a crowdedness score of 96.

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