Nvidia: Short bets against stock top $34B

Nvidia (NVDA) finds itself at the center of speculation with over $34 billion in outstanding short bets stacked against the tech giant's stock, according to S3 Partners. This bearish positioning comes on the heels of the company's highly anticipated 10-for-1 stock split, scheduled for Friday.

Yahoo Finance's Seana Smith and Brad Smith delve into the anticipation surrounding Nvidia's stock.

For more expert insight and the latest market action, click here to watch this full episode of Morning Brief.

This post was written by Angel Smith

Video transcript

Let's talk a little NVIDIA here.

NVIDIA briefly topping Apple as the world's second most valuable company this week.

But could the Tech darlings run soon hit the brakes?

According to S3 Partners, there are about $34 billion in outstanding short bets against the chip giant.

That's about the same amount short sellers have bet against Apple and Tesla combined, though, according to Data Analytics firm.

So ultimate.

This is all coming ahead of NVIDIA's big stock split, where if you look at some of the historical performance 12 months after and this is according to B of a research 12 months after you see a stock split, they tend to beat the index.

The company, uh, initiating the split tends to beat the index here, and the return is typically about 25.4% versus 11.9% return of the S and P 500 here.

But the shorts certainly are adding up, at least in this near term period of time.

The shorts are adding up, and this is going to be interesting to watch here when you take a look at NVIDIA following a suit of some of the other, uh, larger cap tech names in, uh, splitting their stock here over the last several years.

I believe it's the fourth, uh, magnificent seven name to split their stock over the last several years so you can take into account exactly what this will mean for shares.

Ultimately, in the short run, it could be a little bit of a boost.

It could provide a little bit of, uh, a gain here for shares.

But like many of the strategists that we have talked to over the last couple of weeks since this was initially announced, they were, they're not exactly expecting this to be the main driver here of the stock and any sort of movement that we are going to see.

It's gonna seem gonna be more of a blip than anything else.

But again, the data from Bank of America was in just in terms of that out performance.

But when you take a look at their full chart there, you can see there is clearly a discrepancy when you break it down by decades and the out performance versus in a performance of what we had seen.

But overall, that average was just around 25% so clearly outpacing those that did not over the last several years.

I know you've seen me grinning sometime, and it's probably just ignites fear because it's just like, What the heck is he about to say?