Nvidia Short Sellers Flee as Bullish Signs Mount

Nvidia's stock is showing signs of resilience as short sellers dwindle and bulls pile in amid strong demand. Trading data shows that short selling accounted for just 8.93% of shares changed hands yesterday, when the stock gained 0.8%. This marks a significant decline from late August, when short selling accounted for 32.24 million shares.

The retreat of short sellers is seen as a sign that bearish bets are unwinding as the rebound builds momentum. Reports emerged this week that NEBIUS is raising the prices of Nvidia's older chips by about 20%, disproving the idea that these assets have lost value when newer, faster models emerge.

Sustained or rising rental rates for Hopper (H100/H200) chips prove that existing hardware is fully utilized and highly monetizable. This validates the massive capital expenditures pouring into Nvidia's ecosystem. UBS analysts recently called Nvidia undervalued under their HOLT valuation framework, estimating an 86% cash-flow return on invested capital.

Net inflow of $360.86 million more into the stock than out yesterday is a bullish sign, with small-sized orders buying a net $202.5 million. The daily block-order data shows its strongest recent inflow as the share price curls higher. Days to cover short positions have also slipped, lowering the odds of a violent short squeeze.

The cost snapshot shows 76.61% of holders in gains, with average cost at $208 and support at $203.20. The stock is now climbing toward the $221.20 ceiling, which may cap the advance if investors who bought near the top sell to break even.