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Aug 10, 2017

S3 Analytics: Nvidia Short Interest Tops $3 billion Ahead of Earnings

Semiconductor manufacturer Nvidia Corp (NVDA US) is the second largest short in the Semiconductor & Semiconductor Equipment Sector behind Intel Corp (INTC US) but shorts have trimmed $748 million, or 20%, of their short exposure in 2017. It is also the worst performing short in the sector, down $1.4 billion, or -44.6%, in mark to market losses even with today’s $127 million gain due to 4.2% price drop.

Short interest in the worldwide Semiconductor & Semiconductor Equipment Sector is $37.5 billion and has increased by $603 million over the last 30 days. Only two semiconductor shorts in the top ten have had positive returns this year, Xilinx (XLNX US) and Qualcomm (QCOM US) are up $12 million and $226 million respectively.

Shorts have been more active in NVDA recently. After hitting a year to date high of $4.5 billion in late May short interest had retreated to $2.4 billion by early July. There has been a steady increase of short selling over the last month with short interest now at $3.05 billion ahead of earnings.

Shorts have held steady and we see no significant short covering ahead of today’s announcement. Shorts have recouped most of August’s mark to market losses in today’s trading. A disappointing earnings report would help them chip away at the ten figure loss they have incurred in the first seven months of 2017. Semiconductor stocks have outperformed the broader market in 20017, NVDA shorts are hoping for a pullback if the overall market takes a late summer breather.

Want deeper insight into the above analysis? Contact:
Managing Director Predictive Analytics, S3 Partners
The information herein (some of which has been obtained from third party sources without verification) is believed by S3 Partners, LLC ('S3 Partners') to be reliable and accurate. Neither S3 Partners nor any of its affiliates makes any representation as to the accuracy or completeness of the information herein or accepts liability arising from its use. Prior to making any decisions based on the information herein, you should determine, without reliance upon S3 Partners, the economic risks and merits, as well as the legal, tax, accounting and investment consequences, of such decision.

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