$5 billion made overnight — short sellers feast on AI panic sell-off

Short sellers made a huge profit over $5.6 billion in just two days by betting against AI-related companies like Meta, Nvidia, and Microsoft, according to S3 Partners. AI stocks dropped sharply as investors worried the AI boom might not last. The Nasdaq Composite fell 1.5% this week, with a 0.7% dip on Wednesday alone, claims reports.

Meta took the biggest hit, falling 4% in the past five trading sessions, while Nvidia dropped 3.8%. Microsoft and Apple both lost nearly 3%, while Google slipped 1%. Short bets against these five giants: Meta, Nvidia, Microsoft, Apple, and Google, earned short sellers more than $2.8 billion in just two days, as per the reports.

AI stocks crash harder

Other chip stocks fell harder — AMD plunged over 10%, while Broadcom and Micron each lost more than 5%. CoreWeave, a pure AI play renting computing power to Microsoft and Meta, saw its stock crash 24% in the past five sessions, as per reports.


ALSO READ: Cracks in the AI hype? Warning signs suggest the Bubble could soon explode

Meta’s big AI spending spree — billions on acquisitions and massive salaries at Meta Superintelligence Labs — spooked investors. In the past seven days, short positions worth $4.7 billion were taken against Meta, earning more than $1.1 billion in just two days, as reported by Yahoo Finance.

AI bubble warning

Palantir, another AI-linked firm, sank badly — its shares fell over 15% in five days, marking its worst streak since March. Short sellers betting against Palantir made more than $1 billion in two days.

OpenAI CEO Sam Altman warned in a Friday Verge report that AI may be in a bubble like the dot-com era, when the Nasdaq lost 80% of its value. MIT’s Project NANDA study added pressure — it found that 95% of companies using AI are seeing no returns, according to Fortune, as stated in the report by Yahoo Finance.

FAQs

Q1. How much money did short sellers make from AI stocks this week?
Short sellers made over $5.6 billion in two days by betting against AI-linked companies like Meta, Nvidia, and Microsoft, according to reports.

Q2. Why did AI stocks fall suddenly?
AI stocks fell because investors feared the AI boom may not last, with warnings of a possible AI bubble and reports showing many companies see no returns from AI.