Ortex Technologies, a data analysis firm, reported that short sellers made nearly $5 billion in profits by selling off Nvidia’s shares for three consecutive sessions following a series of record price increases. On June 20, 21, and 24, Nvidia shares experienced sharp declines, losing up to 13% of their value and wiping out $30 billion in market capitalization. This downward trend came shortly after Nvidia became the world’s most valuable company last week, surpassing Microsoft and Apple.
During the session on June 24 alone, Nvidia shares dropped by 6.6%, leading short sellers to earn $2.4 billion in profits. This marked the largest profit recorded by Ortex since it began tracking short-selling activity in 2019. When short selling, investors borrow shares to sell at the market price, with the intention of buying them back at a lower price in the future and pocketing the difference as profit. However, if share prices rise instead, short sellers will incur losses, which can be unlimited.
Some analysts attribute Nvidia’s sell-off to investors shifting away from hot AI stocks towards other sectors as the year progresses. Despite the recent decline, Nvidia saw a 6.7% increase in its share price in the most recent trading session, hinting at ongoing optimism regarding the company’s central role in the global AI wave. Since the beginning of the year, Nvidia’s stock has surged by 145%, making it the second-best-performing stock in the S&P 500 index.
Over the past year, Nvidia’s revenue has soared due to major technology companies like Google, Microsoft, Meta, Amazon, and OpenAI investing billions of dollars in the company’s graphics chips. In the first quarter, Nvidia reported record revenue of $26.04 billion and a net profit of $14.8 billion. The company expects its revenue for the current quarter to reach $28 billion.