Short sellers make $6 billion in unrealized profits as neoclouds slide on AI debt fears (updated)

Core Scientific

Today 14:47

Adds share moves in bullet 8
Oct 22 (Reuters) - 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 CRWV.O, IREN IREN.O, Nebius Group NBIS.O, Applied Digital APLD.O and Core Scientific CORZ.O 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 IREN.O and Applied Digital APLD.O have recorded combined paper profits of more than $1.2 billion so far this month
Data center firm Core Scientific CORZ.O 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
On Thursday, CoreWeave and Nebius shares fell more than 4% in early trading, while IREN lost 6.1%, Applied Digital shed 3.7% and Core Scientific dipped 2.4%

(Reporting by Shashwat Chauhan in Bengaluru; Editing by Jonathan Ananda)
((Shashwat.Chauhan@thomsonreuters.com;))