NVDA Shorts Down $2.9 billion on +15% Price Move

Author:

Ihor Dusaniwsky

Managing Director of Predictive Analytics, S3 Partners

February 22, 2024

The share price for software and semiconductor manufacture for GPU’s and AI, NVIDIA Corp (NVDA) jumped over +10% in overnight trading and over +15% in midday trading after announcing blowout fourth quarter 2023 earnings and an elevated first quarter 2024 revenue forecast. NVDA is by far the largest short in the Semiconductor sector with $18.3 billion of short interest and the third largest U.S. short behind MSFT ($20.17 billion) and AAPL ($18.72 billion) and ahead of TSLA ($17.01 billion).

Semiconductor Short Interest

Ticker

SI % Float

Short Interest

NVIDIA CORP

NVDA

1.14%

$18,301,409,869

ADVANCED MICRO DEVICES

AMD

2.50%

$6,560,562,753

BROADCOM INC

AVGO

1.14%

$6,436,354,979

TAIWAN SEMICONDUCTOR ADR

TSM

0.39%

$2,564,453,651

INTEL CORP

INTC

1.35%

$2,476,222,690

QUALCOMM INC

QCOM

1.39%

$2,354,396,611

TEXAS INSTRUMENTS

TXN

1.54%

$2,296,247,085

MICRON TECHNOLOGY

MU

2.04%

$1,818,325,058

MICROCHIP TECH INC

MCHP

3.76%

$1,659,986,104

MARVELL TECHNOLOGY INC

MRVL

2.71%

$1,518,838,786

ON SEMICONDUCTOR

ON

4.49%

$1,479,703,805

ANALOG DEVICES INC

ADI

1.43%

$1,366,378,432

ARM HOLDINGS PLC ADR

ARM

0.96%

$1,205,959,013

NXP SEMICONDUCTORS NV

NXPI

1.74%

$1,052,343,599

LATTICE SEMICONDUCTOR CORP

LSCC

9.59%

$940,568,768

MONOLITHIC POWER SYSTEMS

MPWR

2.48%

$808,904,243

FIRST SOLAR INC

FSLR

4.06%

$610,323,719

GLOBALFOUNDRIES INC

GFS

14.07%

$587,684,768

WOLFSPEED INC

WOLF

15.27%

$478,380,148

SKYWORKS SOLUTIONS

SWKS

2.77%

$457,859,633

Top Twenty

2.03%

$54,974,903,713

Total Sector

2.41%

$59,523,015,107

Short sellers have continued to keep their short exposure in this sector despite stock prices outperforming the market. The Philadelphia Semiconductor Index is up over 11% for the year, almost double the S&P 500’s +6% performance.

Over the last thirty days we’ve seen Semiconductor sector short interest increase by $1.9 billion to $59.5 billion of total short interest. This Change was made up of a $1.67 billion increase in the value of shares shorted (mark-to-market changes in stock price) coupled with $196 million of additional short selling.

The largest increase in short selling over the last thirty days occurred in TSM, NVDA and AVGO while we saw short covering in AMD, ON, TXN and INTC. Short sellers in the sector were actively building their positions even though the market was going against them. The possibility of a delay in Federal Reserve interest rate easing coupled with the hope of a pullback of stock prices in an overheated sector powered by high AI expectations made shorting the Semiconductor sector both a market hedge and an outright Alpha play.

Short Activity (in $mm's)

Ticker

Short Interest

30D Change

30D Shs Shorted

30D Ch MTM

NVIDIA CORP

NVDA

$18,301

$2,494

$374

$2,121

ADVANCED MICRO DEVICES

AMD

$6,561

($949)

($520)

($428)

BROADCOM INC

AVGO

$6,436

$315

$233

$82

TAIWAN SEMICONDUCTOR ADR

TSM

$2,564

$670

$486

$185

INTEL CORP

INTC

$2,476

($500)

($211)

($289)

QUALCOMM INC

QCOM

$2,354

$150

$149

$1

TEXAS INSTRUMENTS

TXN

$2,296

($377)

($230)

($147)

MICRON TECHNOLOGY

MU

$1,818

$40

$162

($122)

MICROCHIP TECH INC

MCHP

$1,660

($256)

($128)

($128)

MARVELL TECHNOLOGY INC

MRVL

$1,519

$19

$137

($117)

ON SEMICONDUCTOR

ON

$1,480

($219)

($305)

$86

ANALOG DEVICES INC

ADI

$1,366

$122

$129

($7)

ARM HOLDINGS PLC ADR

ARM

$1,206

$374

($100)

$474

NXP SEMICONDUCTORS NV

NXPI

$1,052

($36)

($121)

$85

LATTICE SEMICONDUCTOR CORP

LSCC

$941

$108

$63

$46

MONOLITHIC POWER SYSTEMS

MPWR

$809

$103

$11

$92

FIRST SOLAR INC

FSLR

$610

$25

$9

$16

GLOBALFOUNDRIES INC

GFS

$588

($74)

($9)

($65)

WOLFSPEED INC

WOLF

$478

($84)

$36

($121)

SKYWORKS SOLUTIONS

SWKS

$458

($22)

($10)

($11)

Top Twenty

$54,975

$1,905

$153

$1,752

Total Sector

$59,523

$1,870

$196

$1,673

Today’s Semiconductor rally, driven by NVDA’s blowout earnings, has produced an AI generated nightmare for short sellers as they are down $4.3 billion in one day mark-to-market losses, down -7.26%. Nearly two-thirds of these losses were the $2.8 billion of losses for NVDA shorts.

Semiconductor short sellers are now down -$7.2 billion (-12.00%), for the month of February and down -$9.7 billion (-16.8%) for the year. The Semiconductor sector is the worst performing sector on the short side in year-to-date mark-to-market losses, ahead of Interactive Media & Services (-$4.5 billion), Biotechnology (-2.6 billion) and Pharmaceuticals (-$1.9 billion).

Mark-To-Market P\L (in $mm’s)

Ticker

Day MTM P\L

P\L %

MTD MTM P\L

P\L %

YTD MTM P\L

P\L %

NVIDIA CORP

NVDA

($2,829)

-15.46%

($4,376)

-22.98%

($7,522)

-45.49%

ADVANCED MICRO DEVICES

AMD

($700)

-10.66%

($584)

-8.94%

($1,462)

-21.42%

BROADCOM INC

AVGO

($332)

-5.16%

($568)

-8.86%

($849)

-13.58%

TAIWAN SEMICONDUCTOR

TSM

($113)

-4.40%

($352)

-13.87%

($493)

-23.10%

INTEL CORP

INTC

$19

0.75%

($2)

-0.07%

$468

16.68%

QUALCOMM INC

QCOM

($24)

-1.02%

($79)

-3.48%

($124)

-5.63%

TEXAS INSTRUMENTS

TXN

$1

0.04%

($53)

-2.34%

$107

4.36%

MICRON TECHNOLOGY

MU

($92)

-5.07%

$4

0.19%

($2)

-0.10%

MICROCHIP TECH INC

MCHP

$4

0.23%

$37

2.21%

$144

8.07%

MARVELL TECHNOLOGY INC

MRVL

($93)

-6.14%

($44)

-2.82%

($186)

-12.93%

ON SEMICONDUCTOR

ON

($6)

-0.42%

($136)

-9.15%

$161

9.74%

ANALOG DEVICES INC

ADI

$27

1.95%

$18

1.36%

$73

5.52%

ARM HOLDINGS PLC ADR

ARM

($87)

-7.21%

($625)

-55.46%

($585)

-64.16%

NXP SEMICONDUCTORS NV

NXPI

($19)

-1.77%

($136)

-12.54%

($43)

-3.99%

LATTICE SEMICONDUCTOR

LSCC

($6)

-0.63%

($149)

-17.11%

($51)

-6.17%

MONOLITHIC POWER SYS

MPWR

($32)

-3.95%

($161)

-20.44%

($114)

-15.08%

FIRST SOLAR INC

FSLR

$17

2.76%

($0)

-0.06%

$104

16.56%

GLOBALFOUNDRIES INC

GFS

$1

0.18%

$18

3.01%

$79

12.69%

WOLFSPEED INC

WOLF

$0

0.08%

$134

24.99%

$314

53.94%

SKYWORKS SOLUTIONS

SWKS

($4)

-0.85%

($1)

-0.15%

$37

7.79%

Top Twenty

($4,268)

-7.76%

($7,054)

-12.70%

($9,946)

-18.73%

Total Sector

($4,320)

-7.26%

($7,224)

-12.00%

($9,688)

-16.80%

We should expect short covering in NVDA and other stocks in the Semiconductor sector. But since the majority of today’s price move was at or just after the open, the early mark-to-market losses were inescapable for many short sellers that were looking to trim their positions after NVDA’s earnings report. Short sellers will probably wait a bit to look for more favorable exit points throughout the day and over the next several days. Buy-to-covers will help semiconductor stock prices higher along with a reinvigorated jolt of long buying. How many shares will be squeezed? No one but The Shadow knows, that is unless NVDA’s AI GPU chips can foretell the future.

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