Short interest on Nasdaq hit a record high in December 2025, driven by market volatility and AI valuation concerns, raising squeeze risks.

As of December 15, 2025, short interest on Nasdaq reached a record 18.38 billion shares, up from earlier levels, driven by market volatility, policy shifts, and a reassessment of AI-driven valuations. The average "days to cover" rose to 2.36, signaling potential for a short squeeze. Most short interest was concentrated in the Nasdaq Global Market, with smaller and mid-cap stocks like Lucid Group, Avis Budget, and Hims & Hers facing high short positions relative to their float. Large-cap tech firms such as Alphabet and Amazon showed more stable short interest. Despite the index near all-time highs, rising negative gamma in options markets may amplify downside risks.