Short sellers earn $6 billion as AI-focused cloud stocks tumble on debt concerns
Investors betting against five U.S. neocloud and data-center firms have generated about $6 billion in paper gains this month as worries over debt-heavy AI expansion trigger a sell-off.
Short sellers targeting a group of U.S. neocloud and data-center operators have amassed roughly $6 billion in unrealized profits during October, according to ORTEX data. CoreWeave, IREN, Nebius Group, Applied Digital and Core Scientific all carry short interest levels between about 20% and 26% of their free-float shares. CoreWeave's short interest rose to 23.7% from 19.6% earlier in the month, and its stock dropped almost 30%, delivering $1.7 billion in paper gains.
Nebius saw short interest increase to 20% from 15.4% at the start of 2026, generating $2.94 billion in October gains despite a $3.33 billion year-to-date paper loss. IREN and Applied Digital together contributed over $1.2 billion in short-seller profits, while Core Scientific added $115 million. In total, about $17 billion of shares across the five firms are currently sold short, with cheap borrowing rates keeping the positions attractive.
Why it matters
The surge in short-seller profits highlights growing investor doubt about the sustainability of debt-driven AI infrastructure expansion.
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