A monster rally in just 3 stocks has caused short sellers to lose $30 billion so far this year

• The strong rally in stocks this year has sparked big losses for short sellers, according to S3 Partners.
• The research firm said short selling has been on the rise amid the rally as hedge funds increase their leverage.
• These are the three stocks that sparked $30 billion in losses for short sellers, according to S3.

The monster year-to-date rally in tech stocks has sparked massive losses for short sellers, and investors keep increasing their bets via short positions, according to a Friday note from S3 Partners Research.

US equity short interest climbed to $1.001 trillion by the end of June from $864 billion at the end of 2022, S3 Partners' managing director Ihor Dusaniwsky said.

Much of that increase in short selling has been driven by hedge funds that are hedging their long equity bets as they increase their portfolio's leverage.

"Hedge funds increased the total notional size of their portfolios to gain more exposure to the volatile and upward trending market," Dusaniwsky explained.

In total, short sellers have seen $122.1 billion in mark-to-market losses in the first six months of the year, and just three stocks drove a total loss of $30 billion.

With the Nasdaq 100 up nearly 40% year-to-date, the research firm identified the top stocks that have sparked the biggest losses for short sellers, and it's no surprise that they're mostly concentrated in the tech sector.

These are the top 10 stocks that have driven the biggest losses for short sellers so far this year, according to S3 Partners.

10. Coinbase

Ticker: COIN
Short seller losses: $1.5 billion
Year-to-date performance: 129.2%

9. Advanced Micro Devices

Ticker: AMD
Short seller losses: $1.6 billion
Year-to-date performance: 78.0%

8. Broadcom

Ticker: AVGO
Short seller losses: $2.0 billion
Year-to-date performance: 53.2%

7. Palo Alto Networks

Ticker: PANW
Short seller losses: $2.3 billion
Year-to-date performance: 79.7%

6. Amazon

Ticker: AMZN
Short seller losses: $3.2 billion
Year-to-date performance: 55.8%

5. Microsoft

Ticker: MSFT
Short seller losses: $4.0 billion
Year-to-date performance: 42.4%

4. Meta Platforms

Ticker: META
Short seller losses: $4.5 billion
Year-to-date performance: 143.5%

3. Apple

Ticker: AAPL
Short seller losses: $7.5 billion
Year-to-date performance: 48.1%

2. Nvidia

Ticker: NVDA
Short seller losses: $9.1 billion
Year-to-date performance: 194.3%

1. Tesla

Ticker: TSLA
Short seller losses: $13.0 billion
Year-to-date performance: 126.5%