Nvidia Meteoric Rise and Investor Skepticism

As Nvidia market value soars, positioning it to potentially surpass Microsoft as the world’s most valuable company, a significant number of investors are wagering that its shares will eventually decline.

Short Selling Activity:

According to a report from S3 Partners, outstanding short bets against Nvidia total approximately $34 billion.

This figure is nearly double the combined short bets against Apple and Tesla, the next two largest targets for short sellers. Specifically, about $19 billion is bet against Apple, and $18 billion against Tesla.

Relative Impact on Market Value:

Despite the substantial dollar amount, the short bets against Nvidia represent just 1% of its total stock market value, per LSEG data.

This contrasts with the significant impact that similar short-selling volumes would have on smaller companies.

Stock Performance and Market Value:

Nvidia’s stock has surged by 143% in 2024 due to insatiable demand for its high-end AI processors. This demand has driven Nvidia’s market value to $1.012 trillion, briefly surpassing Apple’s to become the world’s second most valuable company.

However, Nvidia’s market value saw a slight retreat of almost 2%, bringing it to $2.96 trillion. Meanwhile, Microsoft’s market value remains at $3.15 trillion after a 13% climb in its stock year to date.