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AI data centre selloff hands short sellers $6 billion in paper gains as debt fears mount

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AI data centre selloff hands short sellers $6 billion in paper gains as debt fears mount

Investors betting against US neocloud and data center companies have raked in $6 billion in paper profits so far this month, after fears their debt-fueled AI buildout was becoming unsustainable sparked a selloff.

Short interest in CoreWeave, IREN, Nebius Group, Applied Digital and Core Scientific ranged from about 20% to 26% of their free float, according to data analytics firm ORTEX.

Current short interest in CoreWeave stands at 23.7% of its free float, up from 19.6% at the start of the month, but slightly higher than the 22.7% seen at the beginning of 2026.

Short sellers have made close to $1.7 billion in paper profits from CoreWeave trades so far this month, after the company’s shares slumped almost 30%.

Short interest on Nebius has climbed to 20% of free float, from 15.4% at the start of 2026.

Investors betting against Nebius have raked in $2.94 billion in paper profits so far in October, though they have recorded a paper loss of $3.33 billion year-to-date.

Short sellers of data center operators IREN and Applied Digital have recorded combined paper profits of more than $1.2 billion so far this month.

Data center firm Core Scientific also had high short interest at 23.1% of its free float, with short sellers clocking $115 million in paper profits in October.

Together, about $17 billion of stock across the five companies is currently sold short and borrowing remains cheap for all of them, ORTEX said.

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