Investors betting against US neocloud and data center operators have generated $6 billion in unrealized profits so far this month, driven by a sharp selloff triggered by fears over debt-fueled AI infrastructure buildouts.
📌 Key Short Interest & Profit Metrics (ORTEX Data):
• $6 Billion Total Monthly Profits: Short sellers capitalized on rising market skepticism regarding heavy leverage in AI infrastructure development across key industry players.
• $17 Billion Total Shorted Stock: Approximately $17 billion across five key neocloud and data center companies is currently sold short, with high short interest ranging from 20% to 26% of free float:
• CoreWeave: Short interest rose to 23.7% of free float (up from 19.6% at month-start). Shares slumped nearly 30%, netting short sellers ~$1.7 billion in paper profits.
• Nebius Group: Short interest reached 20% of free float. Short sellers logged $2.94 billion in October paper gains (despite being down $3.33 billion YTD).
• IREN & Applied Digital: Combined short seller gains exceeded $1.2 billion for the month as shares faced pressure.
• Core Scientific: Short interest stands at 23.1% of free float, yielding $115 million in October paper profits.
• Continued Selling Pressure: Early trading on Thursday saw further dips: IREN (-6.1%), CoreWeave (-4%+), Nebius (-4%+), Applied Digital (-3.7%), and Core Scientific (-2.4%).
💡 Market Takeaway: Concerns over high leverage and unsustainable debt financing for AI compute centers are prompting hedge funds to ramp up short positions on neocloud providers, sparking increased market volatility across AI infrastructure stocks.