Short sellers have faced staggering losses exceeding $250 billion in the latest market rally, with Nvidia (NVDA) and Tesla (TSLA) emerging as the primary drivers of the financial pain. According to data from S3 Partners, these losses accumulated between April 8 and May 20, as U.S. equities rebounded sharply from recent lows and major technology stocks surged to near-record highs.
Nvidia and Tesla alone accounted for more than $19 billion in combined short-seller losses during this period. Tesla led the pack with nearly $9.7 billion in mark-to-market losses for those betting against the stock, as its share price soared 54% from its April low.
Nvidia was close behind, inflicting $9.6 billion in losses on short sellers as its stock climbed 38%. Both companies benefited from distinct catalysts: Nvidia gained momentum from the relaxation of trade restrictions ahead of its anticipated earnings report, while Tesla rallied as CEO Elon Musk redirected his focus to the company after a period away.
The so-called “Magnificent Seven” tech stocks, which include Nvidia and Tesla, were among the top names where short investors suffered the steepest setbacks. In total, these seven stocks accounted for $35.8 billion of the losses, underscoring the concentration of short interest in high-profile technology names during the rally.
The pain for short sellers extended beyond large-cap tech. Popular retail trading stocks such as Palantir and Hims & Hers also contributed to the wave of losses, while short positions in bitcoin-centric firms like MicroStrategy resulted in over $5 billion in additional mark-to-market losses.
Analysts note that the volatility in 2025, exacerbated by policy shifts and tariff announcements, has made shorting stocks a risky proposition. Nearly half of all short positions have been unprofitable this year, with crowded trades amplifying the impact as the market rebounded. The latest rally has reinforced the risks of betting against high-momentum stocks, especially as investor sentiment remains bullish on technology and AI-driven companies.
