The short interest in Apple Inc.’s (NASDAQ: AAPL) stock fell 3.7% in the latter weeks of last month to 63.5 million shares. That was for the period that ended January 29, and it left Apple in the number eight spot among all Nasdaq-traded companies.

Apple’s most recent earnings report, posted earlier in the month, showed a flattening of iPhone sales and only modest improvement in revenue:

Apple announced financial results for its fiscal 2016 first quarter ended December 26, 2015. The Company posted record quarterly revenue of $75.9 billion and record quarterly net income of $18.4 billion, or $3.28 per diluted share. These results compare to revenue of $74.6 billion and net income of $18 billion, or $3.06 per diluted share, in the year-ago quarter. Gross margin was 40.1 percent compared to 39.9 percent in the year-ago quarter. International sales accounted for 66 percent of the quarter’s revenue.

iPhone sales were 74.8 million, just below an anticipated 75 million. Apple also forecast lower revenues for the current fiscal quarter, giving investors more to worry about and sending Apple’s share price lower.

While some investors have started to worry that Apple is now almost entirely about its iPhone refresh cycles, Merrill Lynch is positive on that score, citing also continued strength in China and optionality in Apple’s massive cash balance. The firm even sees promise in the Apple Watch, Apple TV and other services.

As Apple’s share of the U.S. smartphone subscriber market continues to slide, one way the company hopes to boost sales of new iPhones is by beginning to accept trade-ins even if the display screen is cracked, the camera doesn’t work or the buttons don’t function.

Investors short Apple’s stock have benefited from its share price, which is off 19% over the past three months to $94.99. Its shares were up 150% over five years by mid-2015, which shows how much the stock has been punished.

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