The group of stocks known as the Magnificent 7, comprising Google (NASDAQ:GOOGL), Microsoft (NASDAQ:MSFT), Apple (NASDAQ:AAPL), NVIDIA (NASDAQ:NVDA), Amazon (NASDAQ:AMZN), Meta (NASDAQ:META), and Tesla (NASDAQ:TSLA), together account for a market capitalization of $13.5 trillion, which is 27% of the total U.S. market cap of $50.8 trillion.
These stocks also have a considerable amount of short interest, totaling $127 billion, or 12% of the entire U.S. market's short interest of $1.08 trillion, S3 Partners said in a Wednesday report.
Notably, these seven stocks are the most shorted in the U.S. market.
In 2024, despite a more than 5% increase in the Nasdaq, short interest in the Magnificent 7 has grown considerably.
The total rose by 17% from $109 billion to $127 billion, driven by $7.1 billion in new short sales and an $11 billion increase in the mark-to-market value of previously shorted shares.
NVIDIA, Microsoft, and Tesla saw the highest rise in short selling, whereas Apple and Amazon experienced the most short covering since the beginning of the year.
However, the trend shifted over the last week, with a general move towards short covering as the stock prices of these companies began to climb.
“The Mag 7 mark-to-market value of shares shorted has increased by $8.9 billion over the last seven days and we have seen some squeeze related short covering in NVDA which was partially offset with increased short selling in MSFT, AAPL and META,” S3 wrote.
“Today’s price weakness, led by TSLA, has generated $3.3 billion of one day mark-to-market profits for Mag 7 short sellers and turning an unprofitable April into one with $3.0 billion of profits, +2.4%. Mag 7 shorts are still down -$9.0 billion, -7.7%, for the year,” it added.
According to the data analytics firm, TSLA and AAPL have emerged as the most profitable shorts among the Magnificent 7 in 2024, posting gains of $5.6 billion and $2.4 billion, respectively. Conversely, NVDA, META, and AMZN recorded the highest mark-to-market losses, with NVDA leading at -$9.8 billion, followed by META at -$2.3 billion and AMZN at -$2.1 billion.