In a topsy-turvy market environment, hedge funds are increasingly favoring blue-chip stocks like Walmart, Philip Morris, and Amazon for dependable returns. Conversely, they are taking a dim view of clean energy stocks such as Enphase Energy and Albemarle. This contrast is documented in a list of the least and most shorted stocks compiled by Bank of America Securities, released on Monday.

Bank of America developed this list by assessing short interest—the total value of bearish bets placed by hedge funds—against the stock float, which reflects the market capitalization of the available shares for public trading. This research highlights the current sentiment among hedge funds in connection to market conditions, consumer trends, and economic outlook.

Investors have shown a pronounced preference for consumer staples stocks in 2025. Even though the U.S. economy remains fundamentally robust, there has been a noticeable decline in consumer sentiment. The Consumer Staples Select Sector SPDR ETF has achieved a return of 5.7% thus far this year, significantly outperforming the S&P 500, which only returned 1.2%.

According to the Bank of America survey, Walmart ranks as the least-bet-against stock in the market, with short interest comprising just 0.45% of its float. Following Walmart is Philip Morris, Mastercard, Amazon, and Chubb, all exhibiting short interest well below 1%.

Walmart, known for its ‘everyday low prices,’ is seen as particularly resilient during periods of economic uncertainty, as consumer behavior tends to gravitate toward value-oriented retailers when confidence wanes. The retailer’s stock is up by 9.2% this year, although it faced a setback of over 6% after its fourth-quarter earnings report cited a weaker-than-expected outlook. Nevertheless, the stock has since regained much of its lost ground. Analysts believe that Walmart’s rapidly expanding online marketplace may enhance margins and further entrench its position in the U.S. retail market.

CFRA analyst Arun Sundaram remarked, “Walmart has always been known for its everyday value, but is starting to become more known for its quality and convenience,” officially rating the stock as a ‘Buy.’ His price target of $114 suggests an approximate 16% upside from its current trading price of $98.

On the flip side, the stock that hedge fund managers are betting against the most is Enphase Energy, which has seen a staggering short interest of over 16.7%. This is followed by Super Micro Computer, Albemarle—a producer of lithium for electric vehicle batteries—Fox Corp., and Moderna, all of which exhibit short interest exceeding 10%.

The bearish sentiment toward solar stocks like Enphase is not surprising, considering the negative impact of inexpensive competition from Chinese technology coupled with higher interest rates, making financing for solar installations increasingly difficult. After the latest earnings report for Enphase, Jordan Levy, an analyst at Truist, expressed a relatively cautious outlook. “As [the] U.S. market only slow[ly] recovers and elevated competition in E.U. continues, we believe it still takes time for ENPH to return to a normalized growth trajectory.”

However, despite these challenges, Levy maintains a ‘Hold’ rating on Enphase, with a price target of $65, indicating an approximate 18% upside from its current price of $55.

The dichotomy between the stocks hedge funds are embracing and those they are shunning underscores the complexity of the current market landscape. While blue chips are attracting stable investors seeking reliable returns, the struggles faced by clean energy stocks reflect broader economic challenges and market dynamics. As both consumer behavior and regulatory factors shift, the performance of these stocks will remain a closely watched gauge of market sentiment moving forward.