Nvidia

Ihor Dusaniwsky, Author

The possibility of an economic slowdown has hit the technology sector hard, with the S&P 500 Information Technology Sector declining by 10% in the fourth quarter. Today’s poor reported results from both Nvidia (NVDA) and Applied Materials (AMD) pushed most of the companies in the Semiconductor and Semiconductor Equipment Sector into the red. Short sellers in the sector benefited to the tune of $824 million in mark-to-market profits, with the main winners being NVDA and AMD short sellers who are up $529 million and $162 million in mark-to-market profits, respectively.

Long shareholders have been bidding up Micron Technology’s (MU) stock price since May of 2016 when its stock price dipped below $10/share but have gone into overdrive since early February, bidding the stock up almost 50% in just six weeks. Over the same six weeks, short sellers have faced the onslaught of yet another 17 year high, $61.15 on March 20^th, and not bought back any shares and have seen their short exposure increase from $2.6 billion to $3.9 billion.

3D graphics processor designers NVIDIA Corp. (NVDA US) is down 9% after analysts from Instinet, Nomura and BMO gave it a “sell” rating. Citing a slowdown in the gaming industry and strong competition in the chip market the analysts see the stock as overvalued and lowered their target prices. Instinet and Nomura lowered their target prices from $100 to $90 and BMO lowered its price from $100 to $85. While the consensus target price remains high at $118, NVDA’s stock price fell to $100.49 on Thursday and is trading slightly higher today.