Apple Inc. (NASDAQ: AAPL) is the 14th most shorted stock traded on the Nasdaq. For the period that ended April 30, investors were short 51 million shares.
While short sellers can besiege companies like Tesla Inc. (NASDAQ: TSLA) and Advanced Micro Devices Inc. (NASDAQ: AMD), both of which have fewer shares sold short than Apple does, the largest U.S. company by market cap has so many shares traded each day that short interest could barely affect its price at all.
The short interest in Apple fell 9%, or approximately 9 million shares, in the most recent period. Apple trades an average of 35 million shares a day, nearly the size of the short interest. And the short interest is less than 1% of the float. (The short interest in Tesla by comparison is equal to 31% of the float.) A rise in Apple’s shares could endanger the short position almost immediately.
Apple’s recent share prices also have made it particularly dangerous for short sellers. There is little news to make the stock collapse rapidly. On the contrary, Apple’s earnings and news that Warren Buffett is buying more shares in the company have pushed the stock up almost 9% in the past month, a period during which it hit an all-time high of $188.56. The market cap of Apple has risen far enough that the long-time hope that it could be the first among private companies to reach $1 trillion is realistic. The market cap is $926 billion now.
The absolute size of a short position based on raw shares sold short can create an illusion. For Apple, this is currently the case. Its short interest is overwhelmed by its trading volume and float, as well as by the stock’s momentum.