Billions Squeezed Out of Short Sellers as Nvidia Stock Soars

Short sellers were down $2.3 billion on Thursday as shares of Nvidia (NVDA) soared 25% on a bullish forecast for AI chip sales .

Financial data firm S3 Partners tallied $2.3 billion in mark-to-market losses for investors who bet and the stock going down, Reuters reports.

For the year, Nvidia short sellers are likely down more than $8 billion, or 96%, S3 Managing Director Ihor Dusaniwsky wrote. That's the math, but the reality is that many short sellers may have dumped their shares as NVDA rallied to record levels, averting some of the steep losses.

Dusaniwsky noted Nvidia was the fourth-most-shorted stock in the market behind Apple, Tesla and Microsoft. Analysts remain bullish on the stock -- with 47 buy ratings, 10 holds and no sells -- and an average price target of $429, according to data compiled by Bloomberg.

The Santa Clara, Calif.-based chipmaker's stock is up about 160% this year. The stock was higher again this morning in pre-market trading.

Nividia's 25% rise on Thursday marks one of the largest market cap gains in stock market history.

Selling a stock short is a bet that its price will fall. It involves borrowing shares from a brokerage and selling them in hopes of buying them back at a lower price to profit on the difference.