Microsoft, Nvidia, Tesla, Amazon, Alphabet See Declining Short Volume

Short sellers eased up on their bets against Microsoft, $Tesla Motors(TSLA)$  , $NVIDIA(NVDA)$  , $Amazon.com(AMZN)$  , and Google parent $Alphabet(GOOGL)$   amid growing debate whether the recent tech sell-off was overdone. 

Trading in borrowed $Microsoft (MSFT.US)$ shares that were sold short declined for a second straight session to 2.58 million shares Wednesday, representing about 6.1% of the total number of shares that changed hands that day when the stock slipped 2.15%. 

Tech giants Microsoft, Amazon and $Meta Platforms (META.US)$ have been punished by Wall Street for boosting their capital expenditures for artificial intelligence infrastructure buildout amid concerns that the hundreds of billions of dollars they're spending may not immediately generate enough return to justify their cost. The three companies, along with $Alphabet-A (GOOGL.US)$ are expected to boost their spending to more than $600 billion this year, from $359 billion last year. 

Microsoft also got swept in the sell-off in software stocks amid concerns that artificial intelligence is making it easier for people to develop their own apps, a scenario that could lead to the demise of easily-replaceable software.

$Tesla (TSLA.US)$'s short volume declined Wednesday to 4.77 million shares, from 7.51 million shares a day earlier, as the stock advanced for a fourth straight session, weakening the case for betting against the electric vehicle giant that's seeking to dominate the market for robotaxis and humanoid robots. 

The stock headed for a fifth straight advance Thursday. In China, where the company generated more than 21% of its revenue last year, the government banned automakers from selling cars below the cost of production amid a crackdown on a persistent price war that has squeezed margins from manufacturers including Tesla. 

$NVIDIA (NVDA.US)$'s short volume declined for third straight session Wednesday as the stock advanced, raising the risk of a squeeze for skeptics who have been betting against the world's largest publicly traded company. 

On Tuesday, Nvidia's contract chip manufacturer $Taiwan Semiconductor (TSM.US)$ reported a 37% surge in revenue January to about 401.26 billion New Taiwanese dollars, from a year earlier, adding to evidence of continued strong demand. That pace of gains is faster than the 30% full year growth that the company forecast.

The dominant player in advanced chips that power AI is expected to post a 67% surge in revenue in its fiscal first quarter ended Jan. 31, according to the average of analysts' estimates compiled by Bloomberg. The $4.5 trillion company that has consistently surpassed analysts' revenue estimates every quarter since mid 2022 is due to report results on Feb. 25. 

$Palo Alto Networks (PANW.US)$, $Norwegian Cruise (NCLH.US)$, $BP PLC (BP.US)$, $Cenovus Energy (CVE.US)$, $Ford Motor (F.US)$, $Charles Schwab (SCHW.US)$, $The Kraft Heinz (KHC.US)$ $Bank of America (BAC.US)$, and $Huntington Bancshares (HBAN.US)$ also saw higher short volume. 

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