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NVIDIA is navigating a turbulent stretch as mounting short positioning and persistent inst cap outflows collide with market-wide anxiety over massive AI infrastructure financing.
Trading in borrowed Nvidia shares that were sold short climbed to 14.02 m shares Monday, from 9.67 m shares a day earlier. Short interest, or the tally of outstanding short positions has risen to 324 m shares as of mid-July, the highest since April 2023,
Michael Burry is actively shorting major AI and semicon stocks, most notably Nvidia , Micron , Applied Materials , Tesla , Palantir , Caterpillar , and the iShares Semicon ETF (SOXX).
Disclosed via his Substack, Cassandra Unchained, Burry has aggressively expanded his bearish bets. He has shorted shares directly and bought extensive put options, citing unsustainable, circular AI infrastructure financing models.
The next major test will come this week. The Federal Reserve's policy decision and earnings from Microsoft, Meta, Amazon and Apple will provide investors with fresh insight into the outlook for AI spending.
If hyperscalers continue to maintain elevated capital expenditures and reinforce strong demand for AI infrastructure, this week's selloff may ultimately prove to be a valuation reset rather than a fundamental shift in the AI investment story.
