How Moderna's Historic Short Squeeze Upended the AI Chip Trade -- Barrons.com

By Mackenzie Tatananni

Moderna stock caught short sellers off guard on Wednesday as it nearly doubled in its best session on record. Beyond the immediate squeeze, however, the rally had ripple effects across other sectors.

Shares took off after Moderna reported positive trial results for intismeran autogene, a personalized cancer vaccine co-developed with Merck. Data showed intismeran was more effective at preventing the recurrence of melanoma than Merck's Keytruda-the current standard of care-alone.

Previous readouts had been positive, so the news didn't come as a total shock to analysts. However, expectations were high heading into the latest announcement: Moderna stock had already doubled in 2026, fueled by hopes that the vaccine would transform it from a Covid-era success story into a leader in bespoke oncology.

Shares closed up 177% on Wednesday, marking their biggest daily percent increase on record as well as the largest single-day jump for any S&P 500 stock in the last 25 years.

The surge rendered paper losses of about $5.5 billion for short sellers, according to data from S3 Partners, a New York-based analytics firm. While not the sole driver, a squeeze likely contributed to the rally as short sellers rushed to cover their positions, further accelerating the stock's ascent.

At last check, Moderna's short interest hovered around 13.7% of float-remarkably high considering the average for the S&P 500, which stands at 4.18%. For Regeneron Pharmaceuticals, a sector peer of similar market value, that number is just 3.4%.

Dan O'Regan, Mizuho's managing director of equity trading, noted that the Moderna news "ignited a powerful rally in one of the market's most heavily shorted names, triggering a broader squeeze across crowded shorts."

The so-called Moderna squeeze put tremendous pressure on short books across sectors beyond healthcare, O'Regan pointed out. As those positions surged, many hedge funds had to cut risk elsewhere, often by liquidating their top-performing, highest-conviction stocks.

"The result has been a classic factor unwind where popular AI, infrastructure, and momentum longs are being used as sources of funds to cover short-side pain," O'Regan explained.

There were other factors at play. Also on Thursday, Marvell Technology agreed to grant Google's warrants to purchase up to $12.2 billion of its common stock under an expanded partnership. The news caused shares of the chip maker to jump and shares of longtime Google partner Broadcom to fall 4.6%.

With its much larger weighting in the benchmark PHLX Semiconductor Index, Broadcom dragged the entire group lower. The index closed down 2.1% on Wednesday; Marvell, meanwhile, finished up 9.8%.

O'Regan noted that Broadcom's underperformance this year has pulled down the broader index, creating the perception of sector-wide weakness and triggering automated selloffs from momentum traders and index funds.

However, when the dust settled on Wednesday's multisector scramble, all paths led back to Moderna-and the single vaccine readout that turned the market on its head.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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August 20, 2026 13:26 ET (17:26 GMT)