The latest short interest numbers are out. Have a look at the data of key tickers: AMD stock, Alibaba stock and Intel stock.
The latest short interest data which is for the fortnight ending 15th of November is out yesterday. The likes of Dr.Lisa Su led Advanced Micro Devices, Inc. (NASDAQ:AMD), Chinese retail giant Alibaba Group Holding Ltd(NYSE:BABA) and semiconductor giant Intel Corporation (NASDAQ:INTC) could be among the most eagerly watched stocks for their short interest information. All these three stocks have had moved in different directions in the month of November with AMD stock rising initially before losing momentum and trading sideways for the major part. While Alibaba stock has been almost flat this month, Intel stock has lost some ground since the post-earnings rally. Let's now take a look at how short interest has changed for the three stocks in question, over the previous fortnight.
AMD stock short interest spikes further to one year high.
The overall tech sectors saw its sector short interest rising by 28% for the year to $143 billion, up $31.6 billion as analytics firm S3 partners reports. The analytics firm in its report states that this rise in short exposure of the tech sector was majorly driven by the Application Software and Semiconductor sectors whose short positions rose by $5.2 billion and $4.6 billion respectively. The key tickers of AMD and Intel did contribute extensively to rise in the semiconductor sector short exposure. Coming to AMD stock short interest, it jumped by 11.7% in the latest reporting period. Short interest as of mid-November (Nov 15) was 173.1 million shares, surpassing the previous one year high of 160.54 million shares in September end. Short interest in the preceding fortnight was at 154.97 million shares. As a percentage of float, short interest at 19.6% while the days to cover also came in tad high at 3 days.
The bearish sentiment around AMD stock has strengthened recently after its latest quarter earnings release. The short interest in terms of dollar value is now almost $2 billion which is also near its one-year high value. In the coming days, as we mentioned in our recent coverage at Amigobulls on AMD stock, the stock is likely to be very volatile and trade in a range bounded manner till next earnings in the absence of any surprises. The lack of major growth catalysts could hurt AMD stock in the near-term. All the existing growth catalysts seem to be priced in already. EPYC server chips are expected to help AMD gain some server market share where its main rival Intel is almost a monopoly. Though server revenue increased from a year ago, driven by the increased sales of EPYC products, it is yet to be seen how significantly it will impact AMD financials. Yet AMD stock being AMD, one cannot rule out a major uptick on any big positive development.
Short Interest in Alibaba Group Holding Ltd (NYSE:BABA) stock cools off further.
With more than 114% returns in the year-to-date, Alibaba stock has been one of the star performers of 2017. However, at the same time, these humongous returns had made Alibaba stock not so long ago the most shorted stock in the world in terms of dollar value. Many are still not convinced about the Jack Ma led online retail giant's growth story, but slowly and steadily shorts are giving up their bearish stance on Alibaba stock. The latest short interest data suggests another 2.1% decline in Alibaba stock short interest. This is consecutively the fourth straight fortnight in which short interest has declined. It has declined to 120.65 million shares, from 120.24 million shares as of mid-November. Short interest now stands only at 4.7% of Alibaba stock's float, but days to cover is still very high at 6 days.
Alibaba stock is presently trading near its all-time highs. Given the strong growth catalysts, it is only a matter of time before Alibaba stock breaches the psychologically important $200 mark. We at Amigobulls have been bullish on Alibaba stock for some time now and still believe there is plenty more upside left in BABA stock from here. Alibaba stock continues to remain a strong long-term buy despite doubling for the year.
Shorts jump on to Intel Corporation (NASDAQ:INTC) stock as it loses some momentum after the recent rally.
Intel stock is currently having its best run in the year-to-date period since 2014 which has been driven by the nearly 30% gains in the last 3 months. The recent gains have also got the bears interested as short interest in Intel stock for the latest reporting period rose to near 3 year high. Coming to the official short interest numbers in the latest reporting period, short interest in Intel stock rose to 148.97 million shares from 134.92 million shares in the last reporting cycle, up by a significant 10.4%. Short interest in INTC stock as a percentage of float stood at 3.2% of the float, with days to cover at 5 days.
Intel's had recently revised its fiscal 2017 revenue. But that has not inspired confidence in many as the number of investors betting against Intel has risen drastically recently. The Chipzilla had increased its revenue guidance from $60 billion to $62 billion, translating to a growth of 4.4% YoY. Having said all this, the recent spike in short interest has landed Intel in the top shorted stocks on NASDAQ list with the dollars at risk being more than $6 billion. It might be little risky to bet against Intel at the time when overall optimism for Intel stock is improving at the moment.
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