Intel Shares Jump 10%, as Nvidia CEO Touts AI, Raising Risk of Short Squeeze: Short Seller Tracker

$Intel (INTC.US)$ shares jumped more than 10% Monday, raising the risk of a squeeze on short sellers who were betting on a reversal of the chipmaker’s 380% rally over the past year.

The stock recouped most of Friday’s losses, rebounding from Intel’s biggest slump since late January after Nvidia CEO Jensen Huang touted the AI revolution that fanned the rally in chip stocks and said the slump last Friday should give retail investors the opportunity to buy them at a discount.

Trading in borrowed Intel shares that were sold short more than doubled to 12.65 million shares Friday, accounting for about 8.71% of the shares that changed hands that day when the stock tumbled 11.3%. Short selling involves borrowing and selling shares with the expectation of repurchasing them at a lower price to pocket the difference, a practice often used to profit from falling stock prices or to hedge existing holdings. That came as a broader sell-off across the semiconductor sector intensified.

$Alphabet-A (GOOGL.US)$'s Google placed an order for Intel to manufacture more than 3 million tensor processing units (TPUs) in 2028, The Information reported, citing people familiar with the matter. Other companies, including Nvidia are reportedly consider Intel as a backup manufacturer for their advanced chips, although Nvidia hasn't placed an order yet.

Short interest-- the total amount of shares sold short that remain outstanding—rose to 141 million shares as of May 15, from 138.8 million shares two weeks earlier, according to the latest exchange data available. The data serves as a key indicator of market sentiment and confidence. A rise in this figure often signals that professional traders are positioning for continued volatility or potential further declines in the stock's market value.

"We are at the outset of the AI revolution," Huang told reporters in Seoul over the weekend. "We're at the beginning of it, and whatever happened to the stock market, you should be very happy because now you can buy at a discount. Everybody should be very excited."

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