diff --git a/webapp/channels/src/components/new_search/new_search.tsx b/webapp/channels/src/components/new_search/new_search.tsx
index 34ad61e8e9..9810e4be8e 100644
--- a/webapp/channels/src/components/new_search/new_search.tsx
+++ b/webapp/channels/src/components/new_search/new_search.tsx
@@ -94,6 +94,14 @@ const NewSearchContainer = styled.div`
     }
 `;
 
+const NewSearchTerms = styled.span`
+    overflow: hidden;
+    text-overflow: ellipsis;
+    min-width: 0;
+    margin-right: 32px;
+    white-space: nowrap;
+`;
+
 const NewSearch = (): JSX.Element => {
     const currentChannelName = useSelector(getCurrentChannelNameForSearchShortcut);
     const searchTerms = useSelector(getSearchTerms) || '';
@@ -260,7 +268,7 @@ const NewSearch = (): JSX.Element => {
                     />
                 </SearchTypeBadge>
             )}
-            {searchTerms && <span tabIndex={0}>{searchTerms}</span>}
+            {searchTerms && <NewSearchTerms tabIndex={0}>{searchTerms}</NewSearchTerms>}
             {searchTerms && (
                 <CloseIcon
                     data-testid='input-clear'
diff --git a/webapp/channels/src/components/new_search/search_box.tsx b/webapp/channels/src/components/new_search/search_box.tsx
index 4191110318..617faaa43f 100644
--- a/webapp/channels/src/components/new_search/search_box.tsx
+++ b/webapp/channels/src/components/new_search/search_box.tsx
@@ -143,9 +143,17 @@ const SearchBox = forwardRef(
                 const escapedMatchedPretext = escapeRegex(matchedPretext);
                 const caretPosition = getCaretPosition();
                 const extraSpace = caretPosition === searchTerms.length ? ' ' : '';
+                const existing = searchTerms.slice(0, caretPosition).replace(new RegExp(escapedMatchedPretext + '$', 'i'), '');
+
+                // if existing ends with @ and value starts with one, remove it.
+                let val = value;
+                if (existing.endsWith('@') && value.startsWith('@')) {
+                    val = value.slice(1);
+                }
+
                 setSearchTerms(
                     searchTerms.slice(0, caretPosition).replace(new RegExp(escapedMatchedPretext + '$', 'i'), '') +
-                    value +
+                    val +
                     extraSpace +
                     searchTerms.slice(caretPosition),
                 );
diff --git a/webapp/channels/src/components/suggestion/search_channel_provider.tsx b/webapp/channels/src/components/suggestion/search_channel_provider.tsx
index 96107be3ae..65d0e1c3e7 100644
--- a/webapp/channels/src/components/suggestion/search_channel_provider.tsx
+++ b/webapp/channels/src/components/suggestion/search_channel_provider.tsx
@@ -3,8 +3,10 @@
 
 import type {ServerError} from '@mattermost/types/errors';
 
+import {getChannelNameForSearchShortcut} from 'mattermost-redux/selectors/entities/channels';
 import {isDirectChannel, isGroupChannel, sortChannelsByTypeListAndDisplayName} from 'mattermost-redux/utils/channel_utils';
 
+import {loadProfilesForGroupChannels} from 'actions/user_actions';
 import {getCurrentLocale} from 'selectors/i18n';
 import store from 'stores/redux_store';
 
@@ -16,20 +18,7 @@ import type {ResultsCallback} from './provider';
 import SearchChannelSuggestion from './search_channel_suggestion';
 
 const getState = store.getState;
-
-function itemToTerm(isAtSearch: boolean, item: { type: string; display_name: string; name: string }) {
-    const prefix = isAtSearch ? '' : '@';
-    if (item.type === Constants.DM_CHANNEL) {
-        return prefix + item.display_name;
-    }
-    if (item.type === Constants.GM_CHANNEL) {
-        return prefix + item.display_name.replace(/ /g, '');
-    }
-    if (item.type === Constants.OPEN_CHANNEL || item.type === Constants.PRIVATE_CHANNEL) {
-        return item.name;
-    }
-    return item.name;
-}
+const dispatch = store.dispatch;
 
 type SearchChannelAutocomplete = (term: string, success?: (channels: Channel[]) => void, error?: (err: ServerError) => void) => void;
 
@@ -43,45 +32,59 @@ export default class SearchChannelProvider extends Provider {
 
     handlePretextChanged(pretext: string, resultsCallback: ResultsCallback<Channel>) {
         const captured = (/\b(?:in|channel):\s*(\S*)$/i).exec(pretext.toLowerCase());
-        if (captured) {
-            let channelPrefix = captured[1];
-            const isAtSearch = channelPrefix.startsWith('@');
-            if (isAtSearch) {
-                channelPrefix = channelPrefix.replace(/^@/, '');
-            }
-            const isTildeSearch = channelPrefix.startsWith('~');
-            if (isTildeSearch) {
-                channelPrefix = channelPrefix.replace(/^~/, '');
-            }
-            this.startNewRequest(channelPrefix);
-
-            this.autocompleteChannelsForSearch(
-                channelPrefix,
-                (data: Channel[]) => {
-                    if (this.shouldCancelDispatch(channelPrefix)) {
-                        return;
-                    }
-
-                    let channels = data;
-                    if (isAtSearch) {
-                        channels = channels.filter((ch: Channel) => isDirectChannel(ch) || isGroupChannel(ch));
-                    }
-
-                    const locale = getCurrentLocale(getState());
-
-                    channels = channels.sort(sortChannelsByTypeListAndDisplayName.bind(null, locale, [Constants.OPEN_CHANNEL, Constants.PRIVATE_CHANNEL, Constants.DM_CHANNEL, Constants.GM_CHANNEL]));
-                    const channelNames = channels.map(itemToTerm.bind(null, isAtSearch));
-
-                    resultsCallback({
-                        matchedPretext: channelPrefix,
-                        terms: channelNames,
-                        items: channels,
-                        component: SearchChannelSuggestion,
-                    });
-                },
-            );
+        if (!captured) {
+            return false;
         }
 
-        return Boolean(captured);
+        const prefix = captured[1].replace(/^[@~]/, '');
+        const isAtSearch = captured[1].startsWith('@');
+
+        this.startNewRequest(prefix);
+
+        this.autocompleteChannelsForSearch(
+            prefix,
+            async (data: Channel[]) => {
+                if (this.shouldCancelDispatch(prefix)) {
+                    return;
+                }
+
+                let channels = data;
+                if (isAtSearch) {
+                    channels = data.filter((ch: Channel) =>
+                        isDirectChannel(ch) || isGroupChannel(ch),
+                    );
+                }
+
+                // Load profiles for group channels if needed
+                const groupChannels = channels.filter(isGroupChannel);
+                if (groupChannels.length > 0) {
+                    await dispatch(loadProfilesForGroupChannels(groupChannels));
+                }
+
+                // Sort channels
+                const locale = getCurrentLocale(getState());
+                channels.sort(sortChannelsByTypeListAndDisplayName.bind(null, locale, [
+                    Constants.OPEN_CHANNEL,
+                    Constants.PRIVATE_CHANNEL,
+                    Constants.DM_CHANNEL,
+                    Constants.GM_CHANNEL,
+                ]));
+
+                // Get channel names using the selector
+                const channelNames = channels.map((channel) => {
+                    const name = getChannelNameForSearchShortcut(getState(), channel.id) || channel.name;
+                    return isAtSearch && !name.startsWith('@') ? `@${name}` : name;
+                });
+
+                resultsCallback({
+                    matchedPretext: prefix,
+                    terms: channelNames,
+                    items: channels,
+                    component: SearchChannelSuggestion,
+                });
+            },
+        );
+
+        return true;
     }
 }
diff --git a/webapp/channels/src/packages/mattermost-redux/src/selectors/entities/channels.ts b/webapp/channels/src/packages/mattermost-redux/src/selectors/entities/channels.ts
index 690689d02c..551e1e5b61 100644
--- a/webapp/channels/src/packages/mattermost-redux/src/selectors/entities/channels.ts
+++ b/webapp/channels/src/packages/mattermost-redux/src/selectors/entities/channels.ts
@@ -238,6 +238,26 @@ export const getCurrentChannel: (state: GlobalState) => Channel | undefined = cr
     },
 );
 
+const getChannelNameForSearch = (channel: Channel | undefined, users: UsersState): string | undefined => {
+    if (!channel) {
+        return undefined;
+    }
+
+    // Only get the extra info from users if we need it
+    if (channel.type === General.DM_CHANNEL) {
+        const dmChannelWithInfo = completeDirectChannelInfo(users, Preferences.DISPLAY_PREFER_USERNAME, channel);
+        return `@${dmChannelWithInfo.display_name}`;
+    }
+
+    // Replace spaces in GM channel names
+    if (channel.type === General.GM_CHANNEL) {
+        const gmChannelWithInfo = completeDirectGroupInfo(users, Preferences.DISPLAY_PREFER_USERNAME, channel, false);
+        return `@${gmChannelWithInfo.display_name.replace(/\s/g, '')}`;
+    }
+
+    return channel.name;
+};
+
 export const getCurrentChannelNameForSearchShortcut: (state: GlobalState) => string | undefined = createSelector(
     'getCurrentChannelNameForSearchShortcut',
     getAllChannels,
@@ -245,20 +265,18 @@ export const getCurrentChannelNameForSearchShortcut: (state: GlobalState) => str
     (state: GlobalState): UsersState => state.entities.users,
     (allChannels: IDMappedObjects<Channel>, currentChannelId: string, users: UsersState): string | undefined => {
         const channel = allChannels[currentChannelId];
+        return getChannelNameForSearch(channel, users);
+    },
+);
 
-        // Only get the extra info from users if we need it
-        if (channel?.type === General.DM_CHANNEL) {
-            const dmChannelWithInfo = completeDirectChannelInfo(users, Preferences.DISPLAY_PREFER_USERNAME, channel);
-            return `@${dmChannelWithInfo.display_name}`;
-        }
-
-        // Replace spaces in GM channel names
-        if (channel?.type === General.GM_CHANNEL) {
-            const gmChannelWithInfo = completeDirectGroupInfo(users, Preferences.DISPLAY_PREFER_USERNAME, channel, false);
-            return `@${gmChannelWithInfo.display_name.replace(/\s/g, '')}`;
-        }
-
-        return channel?.name;
+export const getChannelNameForSearchShortcut: (state: GlobalState, channelId: string) => string | undefined = createSelector(
+    'getChannelNameForSearchShortcut',
+    getAllChannels,
+    (state: GlobalState): UsersState => state.entities.users,
+    (state: GlobalState, channelId: string): string => channelId,
+    (allChannels: IDMappedObjects<Channel>, users: UsersState, channelId: string): string | undefined => {
+        const channel = allChannels[channelId];
+        return getChannelNameForSearch(channel, users);
     },
 );
 
diff --git a/webapp/channels/src/packages/mattermost-redux/src/utils/channel_utils.test.ts b/webapp/channels/src/packages/mattermost-redux/src/utils/channel_utils.test.ts
index 2c89b946dc..2d40901392 100644
--- a/webapp/channels/src/packages/mattermost-redux/src/utils/channel_utils.test.ts
+++ b/webapp/channels/src/packages/mattermost-redux/src/utils/channel_utils.test.ts
@@ -3,6 +3,7 @@
 
 import type {ChannelNotifyProps} from '@mattermost/types/channels';
 import type {Post} from '@mattermost/types/posts';
+import type {UsersState} from '@mattermost/types/users';
 
 import {
     areChannelMentionsIgnored,
@@ -10,6 +11,7 @@ import {
     sortChannelsByRecency,
     sortChannelsByDisplayName,
     sortChannelsByTypeListAndDisplayName,
+    completeDirectGroupInfo,
 } from 'mattermost-redux/utils/channel_utils';
 
 import TestHelper from '../../test/test_helper';
@@ -179,4 +181,62 @@ describe('ChannelUtils', () => {
         const expectedOutput = JSON.stringify([channelDM, channelGM, channelPrivate, channelOpen1, channelOpen2]);
         expect(actualOutput).toEqual(expectedOutput);
     });
+
+    describe('completeDirectGroupInfo', () => {
+        const currentUserId = 'current_user_id';
+        const currentUser = {id: currentUserId, username: 'current_user_id', first_name: '', last_name: ''};
+        const user1 = {id: 'user1', username: 'user1', first_name: '', last_name: ''};
+        const user2 = {id: 'user2', username: 'user2', first_name: '', last_name: ''};
+        const user3 = {id: 'user3', username: 'user3', first_name: '', last_name: ''};
+
+        const usersState = {
+            currentUserId,
+            profiles: {
+                [user1.id]: user1,
+                [user2.id]: user2,
+                [user3.id]: user3,
+                [currentUserId]: currentUser,
+            },
+            profilesInChannel: {
+                channel1: new Set([user1.id, user2.id]),
+                channel2: new Set([user1.id, user2.id, user3.id]),
+            },
+        } as any as UsersState;
+
+        const baseChannel = TestHelper.fakeChannelOverride({
+            id: 'channel1',
+            type: General.GM_CHANNEL,
+            display_name: '',
+        });
+
+        it('should set display name from profilesInChannel', () => {
+            const channel = {...baseChannel, id: 'channel1'};
+            const result = completeDirectGroupInfo(usersState, 'username', channel);
+            expect(result.display_name).toBe('user1, user2');
+        });
+
+        it('should set display name for larger group', () => {
+            const channel = {...baseChannel, id: 'channel2'};
+            const result = completeDirectGroupInfo(usersState, 'username', channel);
+            expect(result.display_name).toBe('user1, user2, user3');
+        });
+
+        it('should use existing display_name when no profilesInChannel', () => {
+            const channel = {...baseChannel, id: 'channel3', display_name: 'user1, user2'};
+            const result = completeDirectGroupInfo(usersState, 'username', channel);
+            expect(result.display_name).toBe('user1, user2');
+        });
+
+        it('should return original channel when usernames not found', () => {
+            const channel = {...baseChannel, id: 'channel3', display_name: 'unknown1, unknown2'};
+            const result = completeDirectGroupInfo(usersState, 'username', channel);
+            expect(result).toBe(channel);
+        });
+
+        it('should include current user when omitCurrentUser is false', () => {
+            const channel = {...baseChannel, id: 'channel1'};
+            const result = completeDirectGroupInfo(usersState, 'username', channel, false);
+            expect(result.display_name).toBe('current_user_id, user1, user2');
+        });
+    });
 });
diff --git a/webapp/channels/src/packages/mattermost-redux/src/utils/channel_utils.ts b/webapp/channels/src/packages/mattermost-redux/src/utils/channel_utils.ts
index b533986b2f..779217dae2 100644
--- a/webapp/channels/src/packages/mattermost-redux/src/utils/channel_utils.ts
+++ b/webapp/channels/src/packages/mattermost-redux/src/utils/channel_utils.ts
@@ -161,6 +161,11 @@ export function completeDirectGroupInfo(usersState: UsersState, teammateNameDisp
     const gm = {...channel};
 
     if (profilesIds) {
+        // sometimes the current user is not part of the profilesInChannel
+        if (!omitCurrentUser) {
+            profilesIds.add(currentUserId);
+        }
+
         gm.display_name = getGroupDisplayNameFromUserIds(profilesIds, profiles, currentUserId, teammateNameDisplay, omitCurrentUser);
         return gm;
     }