Super Micro Computer stock (NASDAQ: SMCI) is currently the most heavily-shorted equity in the benchmark S&P 500 index.
At present, 17.5% of SMCI’s stock float has been sold short, as noted by trading education provider T3 Live in a May 14 X post.
In addition, data retrieved from third-party sources suggests that it would take 2 days to cover all existing short positions.
Despite these bearish data points, SMCI shares, which were trading at $45.17 at press time on May 14, have seen a 34.46% increase in price over the past week on account of a $20 billion deal with Saudi data center company DataVolt.
The fact that SMCI stock is so heavily shorted could now play in the artificial intelligence (AI) infrastructure provider’s favor. If short sellers find themselves forced to buy to cover, the current Super Micro share price rally could continue.
As heavily shorted as it is, SMCI stock could surge on market-wide recovery and positive analyst coverage
In the post-tariff environment of April and May, Super Micro stock tested resistance at $37 twice — both moves to the upside were unsuccessful. In May, price action established the $42 to $42.47 range as an area of resistance, so for the present rally to continue, SMCI stock will have to hold above those levels.
There are, however, a couple of bullish signals at play, which hint that the odds of the rally continuing are solid. For one, the entire tech-heavy NASDAQ-100 index has broken above a key moving average (MA) — the last time that happened, the index rose to meet the 1.382 Fibonacci extension, and an equivalent move this time around would see a surge back to February levels.
Beyond tech, the wider stock market is also in recovery, with $2 trillion having flowed into equities at the open of this week following easing trade tensions with China.
Lastly, when it comes to SMCI in particular, last week the Super Micro shares received a reiterated ‘Outperform’ rating from banking giant Raymond James researcher Simon Leopold, who reaffirmed a $41 price target, as well as a reiterated ‘Buy’ rating from Loop Capital analyst Ananda Baruah, whose $70 price target represents the Street high forecast.
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