The short interest in Apple Inc. (NASDAQ: AAPL) dropped by 2.7 million shares to 39.1 million ahead of earnings. The figures are for the period that ended July 14.

Apple’s shares are up by 48% over the past year to an all-time high of $153. A number of analysts have forecast the shares will top $200 in the next year, which would push Apple’s market cap above $1 trillion, a number no public company has ever posted.

Apple’s share price, and perhaps the fall-off in short interest, are due to the anticipation of the iPhone 8, which is likely to come out in September or October. There have been a number of rumors that the smartphone will be delayed due to parts shortages or technical glitches. However, this has not deterred investor appetite for the stock.

Estimates for iPhone 8 sales have reached as high as 175 million for the next three quarters, which include the quarter it should be launched, the year-end quarter and the first quarter of calendar 2018. Some of this will be from pent-up demand for a new version of the iPhone. The iPhone 7 has been in the market for a year.

Another factor in the optimism about Apple shares is the expectation that the iPhone 8 will be a big leap forward in terms of features and functions. Recent versions of the phone have had only small improvements over predecessors, which may have dampened demand. The iPhone 8 will have very little competition. Samsung, its primary rival, does not have a popular product in the market. Most of Apple’s other competitors are Chinese companies that have a strong share of their home market but not anywhere else in the world.

Short sellers also have to know that Apple’s earnings are about to be released. If results exceed expectations before the iPhone 8 is even launched, the shares could surge. It has happened before.

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