Short sellers make $6 billion in unrealized profits as neoclouds slide on AI debt fears
FILE PHOTO: CoreWeave logo is seen in this illustration taken July 20, 2026. REUTERS/Dado Ruvic/Illustration/File Photo
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Oct 22 : Investors betting against US neocloud and data center companies have raked in $6 billion in paper profits so far this month, after fears their debt-fueled AI buildout was becoming unsustainable sparked a selloff.
Short interest in CoreWeave, IREN, Nebius Group, Applied Digital and Core Scientific ranged from about 20 per cent to 26 per cent of their free float, according to data analytics firm ORTEX.
• Current short interest in CoreWeave stands at 23.7 per cent of its free float, up from 19.6 per cent at the start of the month, but slightly higher than the 22.7 per cent seen at the beginning of 2026
• Short sellers have made close to $1.7 billion in paper profits from CoreWeave trades so far this month, after the company’s shares slumped almost 30 per cent
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• Short interest on Nebius has climbed to 20 per cent of free float, from 15.4 per cent at the start of 2026
• Investors betting against Nebius have raked in $2.94 billion in paper profits so far in October, though they have recorded a paper loss of $3.33 billion year-to-date
• Short sellers of data center operators IREN and Applied Digital have recorded combined paper profits of more than $1.2 billion so far this month
• Data center firm Core Scientific also had high short interest at 23.1 per cent of its free float, with short sellers clocking $115 million in paper profits in October
• Together, about $17 billion of stock across the five companies is currently sold short and borrowing remains cheap for all of them, ORTEX said
• On Thursday, CoreWeave and Nebius shares fell more than 4 per cent in early trading, while IREN lost 6.1 per cent, Applied Digital shed 3.7 per cent and Core Scientific dipped 2.4 per cent
Source: Reuters
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