Short sellers targeting US neocloud and data center operators have amassed approximately $6 billion in unrealized profits this month. According to data analytics firm ORTEX, bearish investors are capitalizing on mounting debt-funded artificial intelligence spending fears that have triggered a steep sector-wide selloff.
Short Positions in Infrastructure Plays Reach $17 Billion
- Short interest across five major infrastructure plays—CoreWeave, IREN, Nebius Group, Applied Digital, and Core Scientific—hovers between 20% and 26% of their free floats.
- Aggregate short positions across these targets currently stand at roughly $17 billion, while low borrowing costs continue to incentivize bearish bets.
- Market sentiment turned sharply negative as investors question whether aggressive, debt-backed infrastructure expansion can deliver sustainable returns.
CoreWeave and Nebius Face Heavy Bearish Inflows
The pressure is concentrated among firms positioned as primary beneficiaries of the artificial intelligence infrastructure buildout. Short interest in CoreWeave (CRWV.O) climbed to 23.7% of its free float, up from 19.6% at the start of October, as reported by Reuters. Consequently, short sellers generated nearly $1.7 billion in paper profits this month following a nearly 30% slump in the company’s equity value.
Similarly, bearish bets against Nebius Group (NBIS.O) intensified as short interest reached 20% of its free float, rising from 15.4% at the beginning of the year. Traders targeting Nebius accumulated $2.94 billion in paper gains during October alone. Despite this monthly windfall, those same bearish positions remain down $3.33 billion on a year-to-date basis, CNBC-TV18 noted.
Data Center Operators Absorb Sector-Wide Losses
The contagion extended beyond cloud providers into specialized data center operators. Short sellers betting against IREN (IREN.O) and Applied Digital (APLD.O) secured a combined $1.2 billion in paper profits over the month. Meanwhile, Core Scientific (CORZ.O) faced short interest sitting at 23.1% of its free float, handing bearish investors another $115 million in October gains.
The downward momentum persisted through Thursday’s early trading session. CoreWeave and Nebius shares both declined by more than 4%. Losses accelerated elsewhere in the cohort, with IREN dropping 6.1%, Applied Digital shedding 3.7%, and Core Scientific slipping 2.4%.
| Company | Ticker | Short Interest (% of Free Float) | Monthly Paper Profits |
|---|---|---|---|
| CoreWeave | CRWV.O | 23.7% | $1.7 billion |
| Nebius Group | NBIS.O | 20.0% | $2.94 billion |
| IREN & Applied Digital | IREN.O / APLD.O | 20% – 26% | >$1.2 billion (combined) |
| Core Scientific | CORZ.O | 23.1% | $115 million |
Borrowing Costs Keep Bearish Positions Alive
The profitability of these short positions relies heavily on structural market mechanics. According to ORTEX data cited across multiple reports, borrowing remains cheap across all five targeted equities.
The rapid repricing shows that Wall Street is recalculating its expectations. As capital expenditures for artificial intelligence infrastructure scale upward, market participants are increasingly scrutinizing the debt metrics underpinning these expansions.
Disclaimer: The information provided in this article is for educational and informational purposes only and does not constitute financial advice.
