Short bets on S&P 500 Healthcare sector ease in July; Moderna remains most heavily shorted stock

[Health Care Medical Stock Market Industry Sector Wall Street Buildings 3d Illustration]
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The average short interest in the S&P 500 Health Care Index Sector (NYSEARCA:XLV [https://seekingalpha.com/symbol/XLV]) dipped slightly in July to 1.95% from 1.96% in June. However, Moderna (NASDAQ:MRNA [https://seekingalpha.com/symbol/MRNA]) held its position as the sector's most heavily shorted stock, despite the overall softening of negative sentiment.

The healthcare sector, represented by the Health Care Select Sector SPDR® Fund ETF (NYSEARCA:XLV [https://seekingalpha.com/symbol/XLV]) and holding a weightage of 12.12% in the S&P 500 index, has slipped 2.62% year-to-date. This underperforms the broader S&P 500 index (SP500 [https://seekingalpha.com/symbol/SP500]), which has risen 9.98% over the same period.

STOCKS WITH THE LARGEST AND LEAST SHORT POSITIONS

_Ranked by short interest as a percentage of shares float_

[Seeking Alpha]
Seeking Alpha (Seeking Alpha)

Moderna (NASDAQ:MRNA [https://seekingalpha.com/symbol/MRNA]) remained the most heavily shorted stock in the sector, with short interest at 18.29% of its float, a decrease from 19.15% the previous month. Despite the high short position, Seeking Alpha's Quant Rating gives the stock a "Hold" with a score of 2.64 out of 5.

"Moderna (NASDAQ:MRNA [https://seekingalpha.com/symbol/MRNA]) reported a sharp decline in revenue for Q2 2025, earning only $0.1 billion and experiencing a net loss of $0.8 billion. The stock has dropped over 70% in the past year due to investor concerns regarding ongoing losses and reduced demand for COVID vaccines. Despite recent product approval, the company anticipates significant losses in 2025. However, with a strong cash position of $7.5 billion, a revenue recovery is possible through opportunities in vaccines and oncology," a Seeking Alpha analyst wrote [https://seekingalpha.com/article/4808323-moderna-q2-earnings-review-downsizing-triggers-selloff-but-im-long-term-bullish].

In July, DaVita (NYSE:DVA [https://seekingalpha.com/symbol/DVA#hasComeFromMpArticle=false#source=section%3Amain_content%7Cbutton%3Abody_link%7Cfirst_level_url%3Anews]) claimed the second spot for highest short interest at 8.99%, just ahead of Henry Schein (NASDAQ:HSIC [https://seekingalpha.com/symbol/HSIC]) at 7.45%.

On the other end, Johnson & Johnson (NYSE:JNJ [https://seekingalpha.com/symbol/JNJ#hasComeFromMpArticle=false#source=section%3Amain_content%7Cbutton%3Abody_link%7Cfirst_level_url%3Anews]) had the lowest short interest at 0.71%, followed by Eli Lilly and Company (NYSE:LLY [https://seekingalpha.com/symbol/LLY]) at 0.85% and AbbVie (NYSE:ABBV [https://seekingalpha.com/symbol/ABBV#hasComeFromMpArticle=false#source=section%3Amain_content%7Cbutton%3Abody_link%7Cfirst_level_url%3Anews]) at 0.86%.

INDUSTRY ANALYSIS

_Average short interest as a percentage of floating shares_

[Seeking Alpha]
Seeking Alpha (Seeking Alpha)

In July, biotechnology remained the most heavily shorted industry within the healthcare index for the 16th consecutive month, with short interest ticking up to 2.99% from June's 2.95%. The healthcare provider and services sector also saw a significant increase in short interest, rising to the second-highest level at 2.61%, up from 2.07% in June.

In contrast, the pharmaceuticals' industry stood out with the lowest short interest, which fell to 1.56% for the month.

RELATED ETFS: Health Care Select Sector SPDR Fund (NYSEARCA:XLV [https://seekingalpha.com/symbol/XLV]), SPDR S&P Pharmaceuticals ETF (NYSEARCA:XPH [https://seekingalpha.com/symbol/XPH]), VanEck Pharmaceutical ETF (NASDAQ:PPH [https://seekingalpha.com/symbol/PPH]), iShares Nasdaq Biotechnology ETF (NASDAQ:IBB [https://seekingalpha.com/symbol/IBB]), iShares U.S. Pharmaceuticals ETF (NYSEARCA:IHE [https://seekingalpha.com/symbol/IHE]), and Invesco Nasdaq Biotechnology ETF (NASDAQ:IBBQ [https://seekingalpha.com/symbol/IBBQ]).

MORE ON THE HEALTH CARE SELECT SECTOR SPDR® FUND ETF

* XLV: Life Expectancy, Patents, And A Positive Outlook Will Pave The Way [https://seekingalpha.com/article/4801594-xlv-life-expectancy-patents-and-a-positive-outlook-will-pave-the-way]
* XLV: The S&P 500's Most Discounted Sector? Uncover The Hidden Risk [https://seekingalpha.com/article/4799174-xlv-the-sp-500s-most-discounted-sector-uncover-the-hidden-risk]
* Understanding XLV: A Sector ETF Focused On U.S. Healthcare Giants [https://seekingalpha.com/article/4794183-understanding-xlv-sector-etf-focused-on-us-healthcare-giants]
* Overbought or Oversold? A sector-by-sector look at today’s market [https://seekingalpha.com/news/4484664-overbought-or-oversold-a-sector-by-sector-look-at-todays-market]
* The best sectors for tactical investors - BofA quant [https://seekingalpha.com/news/4483106-the-best-sectors-for-tactical-investors-bofa-quant]