Short sellers make $6 billion in unrealized profits as neoclouds slide on AI debt fears
QQQ•Investors betting against five U.S. neocloud and data center companies made $6 billion in paper profits so far in October as fears about debt-fueled AI expansion drove a selloff. About $17 billion of stock across the companies is sold short, ORTEX said.
1. Short interest and profits
Short interest in CoreWeave, IREN, Nebius Group, Applied Digital and Core Scientific ranged from about 20% to 26% of free float, ORTEX data showed. CoreWeave short sellers made nearly $1.7 billion in paper profits this month as its shares fell almost 30%; Nebius short sellers made $2.94 billion, though they were down $3.33 billion year-to-date. Short sellers of IREN and Applied Digital made a combined $1.2 billion, while those betting against Core Scientific made $115 million.
2. Shares fall Thursday
About $17 billion of stock across the five companies was sold short, and borrowing remained cheap, ORTEX said. In early trading Thursday, CoreWeave and Nebius shares fell more than 4%, IREN lost 6.1%, Applied Digital shed 3.7% and Core Scientific dipped 2.4%.
