Tesla spent 864 days as Wall Street’s biggest short bet. Now it’s Apple.

Short interest in Apple
AAPL,
+0.96%
was $18.4 billion as of Wednesday, while short interest in Tesla
TSLA,
+3.59%
was $17.4 billion, according to research from S3 Partners. Tesla spent 864 days as the top stock by short interest — since April 2020 — before Apple stepped in to reclaim the position, the financial data and analytics company reported. Both names are well ahead of third-place Microsoft Corp.
MSFT,
+0.09%,
which had $11.0 billion in short interest Wednesday.

The gradual change largely reflected short sellers trimming exposure to Tesla, rather than big changes in actively shorting of Apple, S3 Partners’ managing director of predictive analytics Ihor Dusaniwsky wrote in a research note.

“While short interest shows us dollars at risk, it does not show us the short trading activity that directly affects a stock’s price,” he explained.

That means Apple’s recent gains are also affecting the total bet against it. The stock has gained 17% in the past three months, and outperformed the major indexes on the year.

“Increases or decreases in short interest are a function of an increase or decrease in shares shorted and the change in a stock’s price,” he said. “Therefore, if shares shorted stay static but a stock’s price increases, its short interest increases — but with no short-side trading in the stock, short selling or short covering, the change in short interest has no effect on the rise or fall of the underlying stock’s market price.”

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Tesla’s stock has also been hot in the past three months, rising 37%, and there has been some short covering in Tesla over the past 30 days, Dusaniwsky said. He added that he’s seen increases in the number of Apple shares shorted over the same period.

When zooming out further, to the start of 2020, both names have seen net short covering.

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Dusaniwsky wrote that while short interest as a percentage of the float is another figure that investors look at when analyzing short activity, it “should only be used for stocks with similar market caps and float shares,” and an Apple-Tesla comparison doesn’t fit that bill. Apple has a $2.47 trillion market value, while Tesla’s stands at $915 billion.