Semi shorts down $18 billion in mark-to-market losses in 2023, S3 Partners says

NEW YORK (Reuters) – Short sellers in U.S. shares related to the semiconductor industry are down $18.31 billion in mark-to-market losses for the year to date, including $7.2 billion in losses since last week’s rally in Nvidia (NASDAQ:)’s stock, according to financial data firm S3 Partners.

Nvidia’s shares are up about 28% since May 24, when the graphics chipmaker gave its blowout forecast after the bell. The PHLX semiconductor sector index gained roughly 15% in May and hit an over one-year high.

“The Semiconductor sectors have been an investing desert for short sellers,” S3 Partners analysts wrote in the report this week.

They added that semiconductor sector short sellers are down 36.3% on an average short interest of $50.5 billion for the year so far, with 63% of every stock shorted in the sector unprofitable and 92% of every dollar shorted a losing trade.

Nvidia has had the largest increase in short covering in the past 30 days, while Advanced Micro Devices (NASDAQ:) has had the largest increase in short selling in that period.

In addition, S3 cited Marvell (NASDAQ:) Technology Inc, Broadcom (NASDAQ:) Inc and Ambarella (NASDAQ:) Inc among stocks prone to a short squeeze.

“We expect short covering in these stocks as short sellers look to trim their exposure and limit future mark-to-market losses if these stocks continue to rally,” S3 analysts said.