Nvidia shorts down $2.3 billion with stock up 25% - S3 Partners

FILE PHOTO: Illustration shows NVIDIA logo

By Caroline Valetkevitch

NEW YORK (Reuters) - Short sellers in shares of Nvidia Corp. were down $2.3 billion in mark-to-market losses Thursday as the stock surged more than 25% in early trading following the chipmaker's blowout forecast, according to financial data firm S3 Partners.

For the year to date, including this morning's move, Nvidia shorts are likely down more than $8 billion, or 96%, Ihor Dusaniwsky, S3 managing director wrote.

"Even with significant short covering in NVDA, it is the fourth most shorted stock in the U.S.," he noted. It follows Apple, Tesla and Microsoft in most-shorted stocks.

Nvidia's stock was last at about $384. The company was getting close to becoming the first trillion-dollar chipmaker after it forecast late Wednesday second-quarter revenue more than 50% above Wall Street estimates. The company said it is increasing supply to meet surging demand for its artificial-intelligence chips, which are used to power ChatGPT and other services.

Including the move on Thursday, the shares are up about 160% this year and easily the top-performing stock in the S&P 500.

Investors who sell securities 'short' borrow shares and then sell them, expecting the stock to fall so they can buy the shares back at the lower price, return them to the lender and pocket the difference.

(This story has been refiled to add Nvidia to the headline)

(Reporting by Caroline Valetkevitch; editing by Lance Tupper and Aurora Ellis)