Investors betting against US neocloud and data centre companies have recorded nearly $6 billion in paper profits so far in October, as concerns over the sustainability of debt-fuelled artificial intelligence infrastructure investments trigger a selloff. According to data analytics firm ORTEX, short interest in CoreWeave, IREN, Nebius Group, Applied Digital and Core Scientific ranged between 20% and 26% of their respective free floats, reflecting growing bearish sentiment towards the sector.
CoreWeave short interest rose to 23.7% of its free float, up from 19.6% at the beginning of October, with short sellers earning nearly $1.7 billion in paper profits after its shares plunged almost 30%. Nebius Group recorded the largest gains for short sellers, with approximately $2.94 billion in paper profits during October, although investors betting against the company remain down $3.33 billion year-to-date. Meanwhile, short sellers targeting IREN and Applied Digital generated combined paper profits exceeding $1.2 billion, while those betting against Core Scientific earned around $115 million.
Across the five companies, approximately $17 billion worth of shares are currently sold short, ORTEX said, adding that stock borrowing remains relatively inexpensive. The selloff continued on Thursday, with CoreWeave and Nebius shares falling more than 4% in early trading. IREN declined 6.1%, Applied Digital dropped 3.7%, and Core Scientific slipped 2.4%. The developments highlight growing investor concerns over mounting debt, capital-intensive infrastructure expansion and the long-term financial sustainability of the AI boom.
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