Musk's Endorsement Trumps Burry's Warning as Nvidia Short Volume Rises

Nvidia's shares received a boost after Elon Musk announced that his space and AI company SpaceX will exclusively use Nvidia's hardware for its AI infrastructure. This endorsement from a high-profile figure was more influential than a cautionary note from investor Michael Burry, who warned of 'future ghost towns' in the AI spending boom.

The trading volume of shorted Nvidia shares rose to almost 19 million on Wednesday, with SpaceX remaining the top favorite among short sellers. Despite this, Nvidia's share price increased by 3.4% on Wednesday and continued to rise on Thursday, adding to the stock's recent gains.

Burry compared the AI infrastructure boom to the 1840s Gold Rush and warned of overcapacity, grouping NVIDIA with Palantir and Caterpillar as beneficiaries of a capital-spending cycle that could eventually lead to significant overproduction. However, Musk's endorsement proved decisive in driving up Nvidia's share price.

The short volume accounted for almost 12% of the shares traded on Wednesday, above the stock's recent average of around 10.7%. The net money flow turned positive by $114.8 million, with medium- and smaller-sized orders driving the buying while larger tickets showed only modest net selling.