Even though the number of shares short in Apple Inc. (NASDAQ: AAPL) is more than double its total for the same period last year, its short interest declined by 8% in the two-week period between January 15 and January 29.
As of the January 29 short interest settlement date, about 91.9 million shares of Apple stock were short. That is about 0.9% of the company’s total float. A year ago, about 41 million shares of Apple were short. Apple’s total float is 16.77 billion shares.
The year-over-year jump in short interest is largely a bet that what goes up must come down — eventually. Apple’s short interest has been declining since reaching a 12-month high of 141 million last July. It is just not dropping very fast. After all, why bet against a stock that added about 73% to its price last year and, at one point in January, had added another 8%.
Investors shaved about 5% from the company’s share price following Apple’s earnings report on January 27. After all, the company only posted its first-ever $100 billion quarterly revenue total and reported nearly $66 billion in iPhone sales. Apple just didn’t pound estimates by a large enough margin.
Since reporting earnings, most analysts maintained a Buy rating on the stock, with a few Hold ratings mixed in. Price targets were either reiterated or raised, and the consensus target is currently $151.75, implying a potential gain of 11.6% from Tuesday’s closing price of $136.01. At the high price target of $175, the potential upside on the stock over the next 12 months is nearly 29%.
Apple stock dipped by about 0.7% Tuesday and traded up about 0.3% to $136.45 early Wednesday. The stock’s 52-week range is $53.15 to $145.09, and the consensus price target has risen by more than $15 a share over the past two weeks.
Note that short sellers also bought into FAANG stocks Facebook and Amazon in the most recent period.
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