Floating loss of $18 billion! Nvidia has become a nightmare for short sellers.
According to data from S3 Partners, as of this year, short sellers of US semiconductor stocks have lost a total of $18.31 billion in market value, including $7.2 billion in losses from shorting Nvidia.
Since Nvidia released its explosive guidance on May 24th, its stock price has risen by about 28%.
The Philadelphia Semiconductor Index (SOXX) rose about 15% in May, reaching a new high in over a year.
Data from financial data company S3 Partners shows that as of this year, short sellers of US semiconductor stocks have lost $18.31 billion in market value, including $7.2 billion in losses from shorting Nvidia.
In addition, S3 also listed Marvell Technology (MRVL), Broadcom, and Ambarella (AMBA) as stocks that are easy to short.
Recently, bears have increased their short positions by nearly $1.4 billion in these chip stocks.
S3 analysts said, "We expect these stocks to see short covering, because if these stocks continue to rise, short sellers hope to reduce their exposure and limit future losses based on market value."
Alec Young, chief investment strategist at quantitative research firm Mapsignals, said that these stocks have been rising all along, so trying to short them and bet on a reversal can be daunting.
Brad Lamensdorf, co-manager of the AdvisorShares Ranger Equity Bear ETF, said that playing this game now is like banging the head of a short seller against a wall.
Lamensdorf said that shorting in the early stages of a trend is very dangerous, just like shorting meme stocks in the past during a frenzy. Even if there are sufficient fundamental reasons to short, short sellers may still be eliminated.