Tesla has given way, and now Apple is the largest short target on Wall Street.

Apple passively becomes the "top short target"...
As short positions on Tesla are reduced, Apple has once again become the "number one short target" on Wall Street.

According to financial analysis company S3 Partners, as of September 13th, Apple's short position was $18.4 billion, surpassing Tesla's short position of $17.4 billion, reclaiming the "top short target" throne after 864 days.

Specifically, there are 0.1286 billion shares of Apple stocks being shorted, with short positions accounting for 0.70% of the float; and 57.3 million shares of Tesla stocks being shorted, with short positions accounting for 2.19% of the float.

Against the backdrop of increasingly expected rate hikes by the Federal Reserve, Wall Street shorts are turning their attention to large-cap tech stocks. Data shows that the top five short targets on Wall Street are Apple, Tesla, Microsoft, Amazon, and Visa, followed closely by Google's parent company, Alphabet.

Source of the picture: S3 Partners' short sell exposure on Tesla decreases, Apple becomes the new top target.

In the research report, Ihor Dusaniwsky, the Director of Predictive Analytics at S3 Partners, wrote that although investors' interest in shorting Apple has increased overall this year, the switch from Tesla to Apple as the top short sell target largely reflects the reduction of exposure to Tesla by the short sellers and does not accurately represent the increased power of shorting Apple.

The change in short sell rankings is mainly due to the reduction of exposure to TSLA by the short sellers, rather than a significant increase in shorting Apple.
In 2022, Although TSLA's stock price declined throughout the year, the short sellers continued to cover their positions and reduce their holdings to prepare for potential short squeezes in the long term.
Since the beginning of this year, the short sell exposure on Apple has increased. There are two possibilities: either investors expect poor performance from the stock in the future, or they are shorting the stock to hedge their holdings of technology company stocks.
Furthermore, Ihor Dusaniwsky explains that although there has indeed been an increase in the number of short positions on Apple stock in the past three months, the more important factor may be the rise in Apple's stock price. While Tesla's stock price has also been strong in the past three months, there has been some short covering on Tesla in the past 30 days, which has resulted in a smaller increase in short positions compared to the stock price movement.

The increase or decrease in short positions is calculated based on the changes in the number of shares shorted and the changes in stock prices.
Therefore, if the number of short-sold stocks remains the same but the price of the stocks rises, the short position will increase. However, without short-selling, covering or trading in stocks, the changes in short position will have little impact on the market price of the stocks.
Data from S3 Partners also shows that since 2020, the overall number of short-sold Tesla stocks has been declining, while the overall number of short-sold Apple stocks has been fluctuating but not changing significantly.