Systems Software Sector Short Side Recap
Author:
Ihor Dusaniwsky
Managing Director of Predictive Analytics, S3 Partners
A cloud service outage caused by a faulty software systems update by cybersecurity software firm CrowdStrike Holdings Inc. (CRWD US) resulted in the Blue Screen of Death (BSOD) hitting millions of computers worldwide. CEO George Kurtz stated that “the issue has been identified, isolated and a fix has been deployed.” CRWD opened down -15% on the news but has recouped some of those losses in mid-day trading.
There are eighty-six stocks with short interest in the Systems Software sector with $48 billion of short intertest and 2.31% Short Interest % Float. MSFT is by far the largest short in the sector with over half the total short exposure in the sector.
Systems Software Short Interest
Ticker
SI % Float
Short Interest
Microsoft Corp
MSFT US
0.86%
$27,643,253,497
Crowdstrike Holdings Inc
CRWD US
5.37%
$4,159,616,535
Palo Alto Networks Inc
PANW US
3.72%
$3,853,023,606
ServiceNow Inc
NOW US
1.65%
$2,481,851,007
Oracle Corp
ORCL US
0.87%
$1,929,314,382
Zscaler Inc
ZS US
5.51%
$959,011,647
Fortinet Inc
FTNT US
2.50%
$916,491,085
Gen Digital Inc
GEN US
3.92%
$569,263,497
CyberArk Software Ltd
CYBR US
5.05%
$569,223,288
Monday.com Ltd
MNDY US
6.90%
$560,977,459
Qualys Inc
QLYS US
10.54%
$549,877,281
UiPath Inc
PATH US
9.50%
$502,154,944
Varonis Systems Inc
VRNS US
8.84%
$452,305,160
Check Point Software Technology
CHKP US
2.92%
$434,691,836
Gitlab Inc
GTLB US
4.59%
$283,962,999
Progress Software Corp
PRGS US
10.60%
$251,744,548
SentinelOne Inc
S US
4.62%
$244,677,791
Rapid7 Inc
RPD US
7.21%
$176,228,407
Tenable Holdings Inc
TENB US
3.28%
$168,261,201
Rubrik Inc
RBRK US
7.69%
$145,234,400
Total Sector
2.31%
$47,754,438,430
Ex MSFT
4.31%
$20,111,184,933
Total short interest in the Systems Software sector increased by a third in 2024, a $11.7 billion in increase in short interest to $47.8 billion. The $11.7 billion increase was made up of $7.5 billion of increased short selling coupled with a $4.2 billion mark-to-market increase in the value of shares shorted. MSFT had by far the largest increase in short selling during the year with CRWD coming in a distant second but still way ahead of the rest of the sector. PANW was the only stock in the sector with significant short covering with $1.0 billion shares bought-to-cover.
Systems Software Short Interest
Ticker
YTD Change
YTD Shares Shorted
YTD Ch MTM
Microsoft Corp
MSFT US
$8,316,684,466
$5,010,444,942
$3,306,239,524
Crowdstrike Holdings Inc
CRWD US
$2,426,962,419
$1,831,608,498
$595,353,921
Palo Alto Networks Inc
PANW US
($597,181,505)
($1,034,837,431)
$437,655,927
ServiceNow Inc
NOW US
$423,949,491
$329,922,186
$94,027,305
Oracle Corp
ORCL US
$348,825,587
($139,877,260)
$488,702,846
Zscaler Inc
ZS US
($199,249,529)
($36,196,004)
($163,053,525)
Fortinet Inc
FTNT US
$169,252,447
$174,359,137
($5,106,690)
Gen Digital Inc
GEN US
$397,513,878
$376,741,353
$20,772,526
CyberArk Software Ltd
CYBR US
$92,451,325
($617,872)
$93,069,197
Monday.com Ltd
MNDY US
$287,138,271
$229,865,353
$57,272,918
Qualys Inc
QLYS US
($46,715,779)
$108,693,840
($155,409,619)
UiPath Inc
PATH US
($216,920,555)
$152,170,123
($369,090,678)
Varonis Systems Inc
VRNS US
$188,407,298
$175,293,979
$13,113,319
Check Point Software Technology
CHKP US
($85,871,639)
($151,661,958)
$65,790,318
Gitlab Inc
GTLB US
($61,814,014)
($7,168,543)
($54,645,470)
Progress Software Corp
PRGS US
$114,095,568
$108,696,051
$5,399,517
SentinelOne Inc
S US
($17,560,115)
$52,204,333
($69,764,448)
Rapid7 Inc
RPD US
($47,284,519)
$18,399,307
($65,683,826)
Tenable Holdings Inc
TENB US
$750,700
$8,751,607
($8,000,907)
Rubrik Inc
RBRK US
$145,234,400
$145,234,400
$0
Total Sector
$11,732,164,004
$7,509,136,230
$4,223,027,775
Ex MSFT
$3,415,479,539
$2,498,691,287
$916,788,251
Over the last thirty days Software Systems short interest increased by $795 million which was made up of $1.1 billion of short selling partially offset by a $325 million decrease in the mark-to-market value of the shares shorted. Shorts were increasing their short exposure to the sector with CRWD the primary beneficiary of $1.2 billion of increased short selling. ORCL was on the other side of the spectrum with $635 million of short covering over the last thirty days.
Systems Software Short Interest
Ticker
30D Change
30D Shares Shorted
30D Ch MTM
Microsoft Corp
MSFT US
($449,814,991)
($74,057,464)
($375,757,527)
Crowdstrike Holdings Inc
CRWD US
$825,634,397
$1,223,305,359
($397,670,962)
Palo Alto Networks Inc
PANW US
$163,018,307
$83,170,443
$79,847,865
ServiceNow Inc
NOW US
$285,679,779
$259,812,899
$25,866,880
Oracle Corp
ORCL US
($757,332,092)
($634,553,191)
($122,778,901)
Zscaler Inc
ZS US
$46,720,786
($9,010,213)
$55,730,999
Fortinet Inc
FTNT US
$60,437,736
$75,199,760
($14,762,024)
Gen Digital Inc
GEN US
$165,229,433
$130,588,154
$34,641,279
CyberArk Software Ltd
CYBR US
$60,021,371
$46,525,222
$13,496,148
Monday.com Ltd
MNDY US
($36,674,314)
($42,011,666)
$5,337,352
Qualys Inc
QLYS US
$18,807,127
($30,668,164)
$49,475,291
UiPath Inc
PATH US
$104,419,898
$75,101,945
$29,317,953
Varonis Systems Inc
VRNS US
$43,855,045
$4,263,726
$39,591,319
Check Point Software Technology
CHKP US
$26,148,546
($7,177,776)
$33,326,323
Gitlab Inc
GTLB US
$47,402,347
($7,598,985)
$55,001,332
Progress Software Corp
PRGS US
$44,075,020
$12,438,980
$31,636,040
SentinelOne Inc
S US
$58,942,401
$38,691,520
$20,250,881
Rapid7 Inc
RPD US
$12,161,124
($5,857,811)
$18,018,935
Tenable Holdings Inc
TENB US
$34,433,735
$18,333,396
$16,100,339
Rubrik Inc
RBRK US
$45,589,577
$34,698,564
$10,891,013
Total Sector
$794,518,372
$1,119,421,366
($324,902,994)
Ex MSFT
$1,244,333,363
$1,193,478,830
$50,854,533
Software Systems shorts are up $414 million in one day mark-to-market profits today, up 0.9%. CRWD shorts were the big winners today, up +$373 million in one mid-day mark-to-market profits, +8.96%. Systems Software shorts have turned around an unprofitable July and are now up $274 million in July month-to-date mark-to-market profits, +0.55%. 2024 continues to be a profitable short trade, up +$1.72 billion in year-to-date mark-to-market profits, +3.48%.
Mark-To-Market P\L (in $mm's)
Ticker
Day MTM P\L
P\L %
MTD MTM P\L
P\L %
YTD MTM P\L
P\L %
Microsoft Corp
MSFT US
$126
0.46%
($51)
-0.18%
$526
1.86%
Crowdstrike Holdings Inc
CRWD US
$373
8.96%
$534
11.21%
$845
17.94%
Palo Alto Networks Inc
PANW US
($57)
-1.49%
($52)
-1.30%
$121
3.03%
ServiceNow Inc
NOW US
($44)
-1.77%
$33
1.28%
$106
4.10%
Oracle Corp
ORCL US
($23)
-1.19%
($44)
-2.20%
$19
0.95%
Zscaler Inc
ZS US
$10
1.01%
($43)
-4.37%
$20
2.02%
Fortinet Inc
FTNT US
($3)
-0.37%
$9
0.88%
$30
3.03%
Gen Digital Inc
GEN US
$4
0.78%
($9)
-1.58%
($9)
-1.57%
CyberArk Software Ltd
CYBR US
$8
1.41%
$2
0.39%
$33
5.74%
Monday.com Ltd
MNDY US
($8)
-1.34%
$1
0.24%
$26
4.44%
Qualys Inc
QLYS US
$14
2.53%
($9)
-1.63%
$4
0.73%
UiPath Inc
PATH US
$2
0.37%
$2
0.33%
$26
5.17%
Varonis Systems Inc
VRNS US
$6
1.38%
($20)
-4.49%
$10
2.27%
Check Point Software Tech.
CHKP US
$1
0.12%
($24)
-5.62%
($17)
-4.06%
Gitlab Inc
GTLB US
($1)
-0.39%
($7)
-2.34%
($20)
-6.90%
Progress Software Corp
PRGS US
$5
1.83%
($6)
-2.29%
($5)
-2.10%
SentinelOne Inc
S US
($11)
-4.62%
($21)
-8.89%
($0)
-0.18%
Rapid7 Inc
RPD US
$1
0.81%
$10
5.55%
$14
7.82%
Tenable Holdings Inc
TENB US
$1
0.42%
($8)
-4.89%
($0)
-0.19%
Rubrik Inc
RBRK US
$0
0.31%
($14)
-9.99%
($14)
-9.92%
Total Sector
$414
0.87%
$274
0.55%
$1,720
3.48%
Ex MSFT
$288
1.43%
$325
1.54%
$1,194
5.68%
We should see continued short selling in this sector, but as we saw over the last thirty days, short selling and short covering will be name specific. Today’s price weakness in MSFT, CRWD, ZS, CYBR and QLYS should inspire more short selling in those names while the upward price moves in PANW, NOW and ORCL should increase short covering.
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