Nvidia Short Sellers Suffer $5 Billion Loss

According to financial data firm S3 Partners, short sellers of Nvidia Corp have taken a hit of $5.09 billion this year, with the stock surging more than 90%. This has made Nvidia the top-performing equity short thus far in 2023, with Apple and Tesla following as the next biggest losers. Apple short sellers have seen losses of $4.47 billion, despite the stock rising approximately 30% in the same period. Meanwhile, Tesla short sellers have lost $3.65 billion year-to-date, as the stock has gained around 33%.

According to research from the firm, short interest in Nvidia has decreased by 18% or 7.04 million shares since the beginning of the year. The company reports that short interest is presently 1.32% of the float, which is the lowest level seen since October 2022. Amid a disappointing outlook from Advanced Micro Devices Inc. announced late Tuesday, Nvidia’s shares fell 1.1% during midday trading on Wednesday. This decline was in line with a broader drop in chip makers.

Short sellers in the investment market borrow shares and sell them, with the hope that the stock price will decrease. They aim to buy back the shares at a lower price, return them to the original lender, and keep the difference as profit.