Nvidia Becomes Largest Short by Dollar Value

According to S3 Partners, Nvidia Corp. (NVDA, Financials) has become the most shorted U.S. stock by dollar value, with investors holding $34.3 billion in negative wagers.

The change has more to do with Nvidia's market cap, which has grown 30% this year to $4.3 trillion, than with mounting doubt. That puts the chipmaker ahead of Apple, whose valuation has dropped 9%, to $3.9 trillion, and Microsoft, whose value has dropped 3.8 trillion.

Tesla has the second-largest short position at $32.7 billion, followed by Microsoft at $30.6 billion and Apple at $27.7 billion. In terms of dollars, Nvidia is ahead, but its short interest as a percentage of available shares has declined 11% this year. Microsoft and Tesla, on the other hand, have seen shorting activity rise by roughly 20%.

There has also been less volatility. Nvidia's daily risk exposure has dropped by 25%, which means that its stock is trading more like a regular stock than the big swings that investors are used to witnessing. Tesla has also gotten less volatile, dropping 22% in recent months.

The figures demonstrate that big-cap tech equities are still the most popular choices for both bullish and bearish investors. The magnitude of Nvidia's short interest shows how intently traders are following its earnings and demand prospects as the company continues to lead the sector.