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Nvidia short-sellers make $5 billion in three days

Nvidia short-sellers make $5 billion in three days
Elmaz Sabovic

It is not often that investors make money betting against the semiconductor industry giant Nvidia (NASDAQ: NVDA), but the recent 15% pullback has finally brought profit to those who were brave enough.

The recent decline, which decreased Nvidia’s market cap by more than $430 billion in just three days, has brought short-sellers profits worth $5 billion, while making $2.4 billion in a single trading session according to June 26 data from Ortex.

This gain is also a record for a single day since 2019, as the short-sellers weren’t usually profitable after an impressive run during which NVDA stock added almost 3,000% to its valuation.

NVDA stock 5-year price chart. Source: Google Finance
NVDA stock 5-year price chart. Source: Google Finance

Traders don’t dare short NVDA stock

Almost continuous daily gains in the previous year for NVDA shares have made its short-sellers almost an extinct species, which shows through data that there is only a 1.24% short interest, with a daily cover of 0.72, meaning that even those traders who dare short NVDA stock, usually opt to keep their bets inside a single day span.

NVDA stock short-seller activity. Source: Fintel
NVDA stock short-seller activity. Source: Fintel

Despite current gain, NVDA short-sellers are deep in the red

Although this recent decline in the NVDA stock price brought one win for short-sellers, the victory belongs to those who decided to initiate long positions in NVDA stock.

The recent stock split has multiplied their shares on a 10-for-1 basis, and the chipmaker company recently announced a quarterly dividend of $0.010 to further increase the appeal for investors.

Furthermore, the estimates are that short-sellers lost trillions of dollars due to Nvidia stock surges during the previous year.

Wall Street analysts see only gains in this artificial intelligence (AI)- oriented stock, which has a “buy” consensus and a 24% upside from its current price levels.

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