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NVIDIA Remains the Biggest Widow-Maker for Short-Sellers So Far This Year, With Short Interest in the Stock Now Down to Just 1.32 Percent of the Float

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by admin May 03, 2023

NVIDIA Short Interest

NVIDIA continues to be the most potent widow-maker trade on the market right now, at least where short-sellers are concerned. Buffeted by relentless hype around everything AI-related, NVIDIA shares are up a whopping 94 percent so far this year, imposing crippling losses on short-sellers in the process.

According to S3 Partners, the short interest (SI) in NVIDIA shares has now declined by 18 percent or 7.04 million shares so far this year and is currently hovering at just 1.32 percent of the stock’s entire float of 2.372 billion shares. Interestingly, this is the lowest short interest in the high-flying stock going as far back as October 2022.

This level of pain for the short sellers is even more confounding when one considers the stratospheric level of NVIDIA’s current valuation metrics. The stock trades at a 2023 Gross Profit to Enterprise Valuation multiple of 34.4x and a 2023 Free Cash Flow multiple of 62x.

The stock continues to benefit from the ongoing AI-focused hype train. NVIDIA announced on Monday that its first DGX H100 systems are now being shipped to customers all around the world. As a refresher, the Hopper H100 GPU is touted as the world’s fastest data center chip. Based on TSMC’s 4nm node, the GPU delivers up to 4,000 TFLOPs of AI computing power.

More importantly, investors expect NVIDIA to corner a significant chunk of the AI training market. The company recently announced a suite of products under the ambit of its AI Foundation Services to enable clients to create and run customized generative AI models. Powered by NVIDIA’s AI supercomputers and the DGX Cloud, the AI Foundation Services currently boasts three main products: NeMo for text-based generative AI applications, Picasso for image-based AI applications, and BioNeMo for applications related to protein structure, sequencing, and molecular docking. Additionally, NVIDIA has also introduced NeMo Guardrails, an open-source toolkit that is designed to ensure security for Large Language Models (LLMs) via a range of programable constraints.

We noted yesterday that NVIDIA’s daily market capitalization gains are now eclipsing its cumulative net income since 2019. For instance, NVIDIA added $29 billion to its market cap on Monday, significantly eclipsing the cumulative net income of $25.389 billion that NVIDIA has earned since its fiscal year 2019.

Written by Rohail Saleem

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