NVIDIA's big rally has completely scared off the short sellers. Data from S3 Partners LLC shows that NVIDIA's stock price surged last Thursday, causing a staggering $3 billion in paper losses for Wall Street short sellers.
Previously, the shorts believed that NVIDIA's sky-high valuation and speculative frenzy would burst the bubble in the AI sector. According to S3, NVIDIA ranks third in the U.S. in terms of the size of short positions, with borrowed and sold stocks totaling $18.3 billion.
However, after NVIDIA's outstanding fourth-quarter earnings report, analysts have significantly raised NVIDIA's target price. From hedge funds to retail investors, everyone is frantically buying NVIDIA, making the short sellers even more wary of the power of &#34;AI faith.&#34;
Alec Young, Chief Investment Strategist at data platform Mapsignals, stated:
<blockquote>
&#34;The short sellers are very weak now.&#34;
&#34;If the shorts had a foothold, a company of this size could not have experienced such a surge in stock price.&#34;
</blockquote>
<h2>Hedge funds and retail investors are buying NVIDIA like crazy, and the short sellers are getting nervous</h2>
Due to the slow pace of profit growth and poor short-selling profits, as the stock prices of the &#34;Big Seven&#34; in the U.S. soared, their bearish bets did not increase.
JPMorgan strategist Nikolaos Panigirtzoglou estimates that short positions have dropped to only 1% of the outstanding shares of the &#34;Big Seven,&#34; hovering near the lowest levels since at least 2015.
On the contrary, bullish bets continue to grow. The latest 13F filings show that hedge funds have increased their holdings of the &#34;Big Seven&#34; stocks, and retail investors have done the same.
As the hottest company among the &#34;Big Seven&#34; this year, according to S3 Partners LLC data, NVIDIA's stock price surged by 16% last Thursday, causing a whopping $3 billion in paper losses for Wall Street short sellers.
Goldman Sachs has stated that NVIDIA is currently the most important stock on Earth. &#34;The increase in market value has injected vitality into retail investors. The level of activity in stock discussion boards and bullish options markets has reached the highest level since March 2020.&#34;
According to data compiled by Bloomberg, the average target price for NVIDIA is currently $863, implying a further upside of over 9% for the stock.
In the high price range, Rosenblatt Securities has raised NVIDIA's target price from $1,100 to $1,400, more than 75% above the current stock price, making it the highest target price on Wall Street.
<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/9ff6af0e-1ef6-422c-807b-3e46cecf6ed6.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/9ff6af0e-1ef6-422c-807b-3e46cecf6ed6.png"/>
Banrion Capital Management LLC CEO Shana Sissel stated:
&#34;I am actively looking for any possible missteps by NVIDIA, but it's hard to find any real vulnerabilities.&#34;
Sissel has held NVIDIA stocks since 2017, saying:
&#34;I wish I could buy some at $650.&#34;
Ken Mahoney, CEO of Mahoney Asset Management, while not concerned about overvaluation, still sold a portion of his NVIDIA holdings to cash in.
&#34;As a precaution, we sold about 20% of our position,&#34; Mahoney said. &#34;If there is an economic slowdown in the coming days or weeks, or if the stock price rebounds slightly, we will have some funds to redeploy.&#34;
It is worth noting that with the strong support of the &#34;Big Seven,&#34; the US stock market has become even more expensive, giving bears greater room for imagination.
The S&amp;P 500 Index and the Nasdaq 100 Index have risen in 15 out of the past 17 weeks, putting pressure on active fund managers. Additionally, the price-to-earnings ratio of the Nasdaq 100 Index has climbed to over 30 times, with a price-to-sales ratio of 5 times, reaching valuation levels rarely seen since the end of the internet bubble and its aftermath.

NVDA

Last Thursday, NVIDIA's stock price surged by 16%, resulting in a staggering $3 billion paper loss for the short sellers. "Now the short sellers' power is very weak."

Is it like a mantis trying to stop a car? Wall Street "dare not short AI"?