A 1,100% rally in six months leads to a $3 billion loss for short-sellers of this stock

Shares of Sandisk Corp. have doubled in just the first two weeks of 2026. The 112% move is not the story though. The stock is up 1,117% in the last six months and this rally, which currently shows no signs of slowing down, has resulted in a massive loss for short-sellers.

Yet, short positions in the stock continue to climb, along with the stock price, putting the risk of a short squeeze to an "extreme" level, as per S3 partners.

A research note from S3 said that short sellers have continued to aggressively pile into sell positions over the last few months as the stock rally continues unabated.

Short Interest, a metric showing the proportion of available shares borrowed and sold by bearish traders has risen to 7.5% of Sandisk's total float, compared to 4% earlier, according to the S3 note.

The rally in Sandisk's shares has now taken the mark-to-market losses on short positions past the $3 billion mark, driving S3's risk score to 82.5, a level the firm describes as "extreme."

A short squeeze occurs when a rapid rise in a stock’s price forces short sellers to buy back borrowed shares to close their positions, often at a loss, which can drive the price even higher.

Sandisk's shares have rallied as the AI-trade has now moved towards storage stocks and as a shortage of flash memory has allowed the company to raise prices. Nvidia CEO Jensen Huang's remarks at the CES Technology conference also added to the rally, when he said that the storage space is a "completely unserved market."

California-based Sandisk is known for its high-performance storage drives, memory cards and USB flash drives.

Sandisk, part of Western Digital Corp.'s flash memory business, was spun-off and re-listed in February last year, from when the stock has risen 1,300%, majority of the moves having taken place in the last six months.

(With Inputs From Agencies)