Stock up 50%, SI Notional up 60%, Active Long Interest Declining
When we look at stocks showing significant market cap growth YTD paired with a sharp increase in short interest notional, only a few stand out—Oracle (ORCL) is one of them.
ORCL ranks fifth among stocks with the largest increase in short interest notional, rising from $3.3B to $5.3B—an increase of approximately $2B, or 60%.
The primary driver of this short position growth is ORCL’s 49% stock price increase, which accounts for most of the rise in short interest notional. Its market cap has surged by $232B, making it one of the top-performing stocks year-to-date.
That surge has been fueled by strong momentum in its cloud infrastructure business and aggressive expansion into AI-powered services. Oracle’s role in the digital transformation wave, with its cloud and AI offerings gaining serious traction.
The remaining 10% increase stems from new short positions, as reflected in the uptick in short interest % of float—a key metric in short-selling sentiment data.
Short interest notional initially outpaced the stock price but later lagged, as the short interest % of float rose before tapering off—indicating shifts in short-selling sentiment.
Long interest data from active managers declined alongside rising short interest, pointing to a broader shift in negative overall investor sentiment.
Hedge fund positioning data also indicates a reduction in ORCL allocations, reinforcing the trend of reduced institutional conviction.
As ORCL’s stock price climbed starting in May, institutional long holdings data shows that long interest as a percentage fell—suggesting active investors likely took profits and reduced exposure.
The rising P/E ratio may have been a reason for active managers to sell, combined with concerns of competitors in the AI space.
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