NVIDIA Corporation (NVDA), the renowned chipmaker, has sent shockwaves through the stock market as its shares soar to unprecedented heights. The company’s sales forecast has surpassed all expectations set by analysts, leaving short sellers reeling from colossal losses.
According to data from S3 Partners LLC, short sellers faced a staggering $2.3 billion in paper losses in a single day, bringing their mark-to-market losses for the year to a whopping $8.1 billion.
The chipmaker’s remarkable rally has prompted many short sellers to abandon their positions, resulting in a nearly 11% decrease in the number of shares shorted over the past 30 days. This indicates that traders are covering their positions at a loss. Overall, the total shares shorted have declined by approximately 23% in 2023.
Despite the decrease in short positions, the notional short interest value for Nvidia remains above $9 billion, making it the fourth most-shorted stock in the United States, trailing only Apple Inc., Tesla Inc., and Microsoft Corp.
Nvidia has emerged as a key player in the flourishing field of artificial intelligence, propelling its success. Wall Street analysts believe that the winning streak for Nvidia is far from over, which spells more trouble for short sellers. Currently, the stock boasts an impressive 47 buy ratings, 10 holds, and no sells. Bloomberg’s compiled data reveals an average price target of $429.
In a note upgrading Nvidia from neutral to outperform, Wedbush analyst Matt Bryson expressed his optimistic outlook, stating, “Our expectations for NVDA’s future revenues are lifting substantially.” He raised his price target to $490, implying an additional potential upside of roughly 29% from the previous day’s closing price.