SoftBank Group's recent stock rally is raising short squeeze risks as short interest hits a one-year high. According to S3 Partners LLC, short interest as a percentage of float reached 2.27% as of Wednesday, the highest since July 2025, with notional short interest valued at $3.9 billion — the most since at least 2015. The stock surged 31% this month amid momentum around OpenAI's new GPT-6 Astra model, generating roughly $1 billion in paper losses for short sellers this month and $1.2 billion year-to-date.

Sam Pierson, director of research at S3, warned that losses are pressuring managers and squeeze risks are elevated. A short squeeze could support the Nikkei 225, where SoftBank holds the second-largest weighting. However, concerns over SoftBank's outsized AI investments and financing cloud the outlook.

Tomoichiro Kubota, chief market analyst at Matsui Securities Co., noted the upcoming SB Energy IPO will be pivotal; strong demand and firm pricing could trigger further short covering.