Investors Laying Groundwork to Profit Massively When Economy Collapses

S3 Partners says short interest in the S&P 500 has risen to its highest level since 2010, signaling growing bearish bets on U.S. stocks.

About 3.7% of the index’s free float is now sold short, a level approaching what was seen before the 2008 financial crisis.

Investors are increasingly worried that heavy AI spending is not translating into enough revenue growth to justify current valuations.

Alphabet’s negative free cash flow and higher capital spending guidance are being seen as signs of pressure on big tech.

The jump in shorting suggests investors are hedging against a possible market downturn tied to fears of an AI-driven bubble.