Super Micro Computer (SMCI), an AI data center infrastructure firm, recently announced that it has received a significant amount of new orders totaling in the tens of billions of dollars over the last quarter.
This surge in orders highlights the growing demand for artificial intelligence infrastructure, leading to a nearly 20% increase in SMCI’s shares, as reported by The Kobeissi Letter.
With revenue expected to nearly quintuple compared to the same period last year, this order influx reflects the rapid expansion of the AI sector.
While SMCI is garnering significant investor interest, The Kobeissi Letter also cautions that more investors are taking a bearish stance on the US stock market.
“Bearish bets on US stocks are surging:
Short interest in the S&P 500 is up to ~3.7% of its free float, nearing the highest level since 2010.
Short interest in the Russell 3000 has also risen to ~6.1%, approaching an all-time high.
Both metrics have been steadily increasing since the beginning of 2025.
Additionally, short interest across all NYSE-listed stocks reached a record 9.0% of shares outstanding in late June.
For comparison, this metric peaked at ~5.0% during the 2008 Financial Crisis and ~6.0% during the 2020 pandemic.”
According to The Kobeissi Letter, the increasing short interest indicates that the market is ripe for a potential short squeeze.
A short squeeze occurs when stock prices experience a sudden surge, leading those who placed bearish bets to buy back shares simultaneously to cover their positions, thus fueling further price increases.
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Image Credits: Midjourney
