SAN FRANCISCO: A semiconductor sell-off sparked by a dismal sales forecast from Nvidia Corp. resulted in a windfall for short sellers.
Investors betting against chip stocks had reaped US$824 million in mark-to-market profits as of Friday afternoon, according to financial analytics firm S3 Partners. The majority came from short positions in Nvidia, whose 19% loss was its worst in 10 years. Competitor Advanced Micro Devices Inc fell 3.9%.
The total value of short interest in Nvidia has fallen about 20% since the start of October and now stands at US$2.7 billion, according to S3 managing director Ihor Dusaniwsky. Short sellers have been even more aggressive in cutting exposure to AMD as the stock has fallen from a 12-year high in September. AMD short interest has declined by about 40% to US$2.5 billion in the fourth quarter, according to S3.