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Stock Market Today: Here's the List of the 10 Most-Shorted Stocks ...

The Most Shorted Stocks in the S&P 500 Heading into 2025: A Deep Dive into Kohl's, CRISPR Therapeutics, BigBear.ai, and Beyond

As we approach 2025, the stock market continues to be a battleground for investors with diverging views on the economy, corporate performance, and emerging technologies. One of the most telling indicators of market sentiment is short interest—the percentage of a company's shares that investors are betting will decline in value. Short sellers borrow shares, sell them, and hope to buy them back at a lower price to pocket the difference. High short interest often signals skepticism about a company's fundamentals, strategy, or market position. However, it can also set the stage for dramatic short squeezes if positive news emerges, as we've seen in meme stock phenomena like GameStop.

According to recent data from financial analytics firms, several S&P 500 constituents are drawing intense scrutiny from short sellers. These stocks span various sectors, from retail to biotechnology and artificial intelligence, reflecting broader uncertainties in consumer spending, innovation pipelines, and tech hype. In this article, we'll explore the most shorted stocks in the S&P 500 as we head into 2025, delving into the reasons behind the bearish bets, the companies' recent performances, and what this could mean for investors. While short interest isn't a foolproof predictor of stock declines, it provides valuable insights into where Wall Street sees vulnerabilities.

Kohl's: Retail Woes Amid Shifting Consumer Habits

Topping the list of highly shorted stocks is Kohl's Corporation (KSS), the department store chain that's been a staple in American malls for decades. With short interest hovering around 30% of its float—meaning nearly a third of available shares are being shorted—Kohl's exemplifies the challenges facing traditional brick-and-mortar retailers in an era dominated by e-commerce giants like Amazon and fast-fashion disruptors like Shein.

Kohl's has struggled with declining same-store sales, inventory management issues, and a failure to resonate with younger demographics. In recent quarters, the company reported sluggish revenue growth, attributed to inflationary pressures squeezing middle-class consumers and a broader shift toward online shopping. Efforts to revamp its stores, such as partnerships with Sephora for in-store beauty sections and expansions into home goods, have yielded mixed results. Critics argue that Kohl's lacks a clear differentiation strategy in a crowded retail landscape, where competitors like Target and Walmart have successfully integrated digital and physical experiences.

Short sellers are particularly bearish due to Kohl's high debt levels and vulnerability to economic downturns. With interest rates potentially remaining elevated into 2025, consumer discretionary spending could take a hit, further pressuring margins. Analysts point to the company's recent earnings misses and downward revisions in guidance as fuel for the shorts. However, optimists note that any signs of a retail rebound—perhaps driven by holiday spending or successful store remodels—could trigger a short squeeze, given the elevated short interest. As we enter 2025, Kohl's will need to demonstrate agility in adapting to omnichannel retail trends to fend off the bears.

CRISPR Therapeutics: Biotech Volatility in Gene-Editing's Frontier

Another standout in the short interest rankings is CRISPR Therapeutics (CRSP), a biotechnology firm at the forefront of gene-editing technology. With short interest exceeding 25% of its float, CRISPR represents the high-stakes world of biotech investing, where groundbreaking innovations collide with regulatory hurdles, clinical trial risks, and fierce competition.

CRISPR's flagship product, Casgevy—a gene therapy for sickle cell disease and beta-thalassemia developed in partnership with Vertex Pharmaceuticals—marked a historic milestone as the first CRISPR-based therapy approved by the FDA in late 2023. This approval sent shares soaring, but enthusiasm has waned amid slower-than-expected patient uptake and pricing challenges. The therapy's high cost—around $2.2 million per treatment—has raised questions about accessibility and reimbursement from insurers, potentially limiting its market potential.

Short sellers are betting on several headwinds: the complexity of administering the treatment, which requires bone marrow transplants; competition from other gene therapies; and the broader biotech sector's funding crunch amid higher interest rates. CRISPR's pipeline includes experimental treatments for cancer, diabetes, and cardiovascular diseases, but these are years away from commercialization, leaving the company reliant on milestone payments and partnerships. Recent stock volatility, including a sharp drop following earnings reports that highlighted rising R&D expenses without commensurate revenue growth, has emboldened the shorts.

Looking ahead to 2025, CRISPR's fate could hinge on real-world data from Casgevy patients and progress in its oncology programs. If positive trial results emerge, it could spark a rally and squeeze shorts. Conversely, any setbacks in clinical trials or regulatory delays could validate the bearish thesis. The company's story underscores the inherent risks in biotech, where scientific promise often outpaces commercial reality, making it a prime target for skeptics.

BigBear.ai: AI Hype Meets Execution Challenges

In the rapidly evolving artificial intelligence sector, BigBear.ai Holdings (BBAI) stands out with short interest approaching 28% of its float. This defense and intelligence-focused AI company, which went public via a SPAC merger in 2021, has ridden the AI wave but faced scrutiny over its ability to deliver on lofty promises.

BigBear.ai specializes in data analytics, machine learning, and decision intelligence tools, primarily serving government clients like the U.S. Department of Defense and intelligence agencies. Its platforms aim to process vast datasets for predictive insights, from supply chain optimization to cybersecurity threats. The company has secured notable contracts, including work on AI-driven simulations for military training, which fueled optimism during the AI boom of 2023-2024.

However, short sellers are wagering on execution risks, including inconsistent revenue growth, high cash burn, and dependence on government contracts that can be unpredictable due to budget cycles and political shifts. BigBear.ai has reported quarterly losses, with critics highlighting integration challenges post-acquisitions and competition from established players like Palantir Technologies and C3.ai. The stock's valuation, once inflated by AI hype, has corrected sharply, reflecting doubts about near-term profitability.

As 2025 unfolds, BigBear.ai's prospects could improve with expanded federal spending on AI amid geopolitical tensions. Initiatives like the U.S. government's push for AI in national security might provide tailwinds. Yet, any delays in contract wins or failures to meet guidance could deepen the sell-off. This stock epitomizes the AI sector's bifurcation: while generative AI garners excitement, enterprise-focused firms like BigBear.ai must prove scalable business models to silence the doubters.

Broader Implications for the S&P 500 in 2025

Beyond these individual names, the landscape of highly shorted S&P 500 stocks reveals thematic vulnerabilities. Other notable mentions include companies in electric vehicles, such as Rivian Automotive (RIVN), plagued by production ramps and profitability concerns; and consumer goods firms like Beyond Meat (BYND), facing demand slumps for plant-based alternatives. Short interest in these areas often correlates with macroeconomic factors: persistent inflation, supply chain disruptions, and a potential slowdown in consumer spending.

Analysts from firms like Goldman Sachs and Morgan Stanley suggest that 2025 could see a divergence in market performance, with growth stocks under pressure if interest rates don't fall as aggressively as hoped. The S&P 500, having hit record highs in 2024, might face headwinds from election-year uncertainties and global trade tensions. High short interest could amplify volatility, creating opportunities for both bears and bulls.

For investors, monitoring short interest is crucial. It can signal undervalued opportunities if fundamentals improve, or warn of impending declines. Strategies like pairs trading—shorting a weak stock while going long on a strong peer—might gain traction. Moreover, the rise of retail investors via platforms like Robinhood has made short squeezes more common, as seen in past rallies.

In conclusion, the most shorted stocks in the S&P 500 heading into 2025—led by Kohl's, CRISPR Therapeutics, and BigBear.ai—highlight sectors grappling with transformation and uncertainty. Retail is adapting to digital shifts, biotech is navigating innovation's perils, and AI is separating hype from reality. While short sellers dominate the narrative now, these companies' ability to execute strategies and capitalize on market recoveries will determine their trajectories. Investors should approach with caution, blending fundamental analysis with an eye on sentiment indicators. As the new year dawns, these battlegrounds will test the resilience of corporate America and the acuity of market participants alike.

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Read the Full Business Insider Article at:
[ https://www.businessinsider.com/most-shorted-stocks-kohls-crispr-big-bear-ai-sp500-2025-7 ]