Hedge funds have never been this bearish on US software stocks: Hedge fund short exposure on US software and services stocks is up to a record 3.8%. Short exposure has surged +90% since 2022. By comparison, the 2019 low was 1.6% while the previous peak in 2021 was 3.2%. As a result, hedge funds' long-short ratio for the sector is down to an all-time low of 1.15 from the 2021 peak of 4.74. Furthermore, funds are underweight software and services stocks versus the Russell 3000 by a record -6.8 percentage points, down from +7.0 points in 2023. Is a short-squeeze brewing in software?