The semiconductor sector has had a year to remember with most stocks recording double-digit gains tracking the surging prices of popular cryptocurrencies Bitcoin and Ethereum. However, despite broad-based returns, skeptics continue to build short positions against some of the sectors best performers of 2017. California-based Advanced Micro Devices Inc. (AMD) has borne the brunt of industry skeptics of late. "Short Interest in shares of Advanced Micro Devices (AMD US), a semiconductor manufacturer, reached an all-time high this week," Brett Weiss, director at S3 Partners, a financial analytics firm said. 

"S3 Partners real-time short interest analytics calculates that the real time dollars at risk, on the short side, is $2.02 billion. This is an increase of 83% in shares and 105% of dollars at risk, just since the beginning of 2017."

After trading at an all-time high of $15.65 a share in July, shares in AMD have plateaued, which has seen short sellers flock to bet against the company as it lags competitors Nvidia Corp. (NVDA) and Intel Corp. (INTC).  Additionally, news that Abu Dhabi-based private equity firm Mubadala Development sold more than half its stake earlier in the year has investors wondering if there is any further upside for the stock. 

Source: S3 Partners

What's more concerning for AMD shareholders is the potential for shorts interest to mount. Despite at a record high, S3 Partners calculates that just 18 percent of shares are utilized for short selling, and because it trades near general collateral levels, it remains a relatively cheap stock to short. (See also: Simulator How-To Guide: Short Selling.)

As short interest in AMD increases, those betting against competitor Nvidia is falling as losses mount. Year-to-date, shares in Nvidia are higher by 67 percent and short sellers are down a whopping $1.77 billion in mark-to-market losses. The bad news for Nvidia skeptics continued Monday when SunTrust analyst William Stein increased his price target to $200, representing a 12 percent increase from Monday's closing price. (See also: NVIDIA Price Target Hiked to $200 by SunTrust.)

As for AMD, the average target price according to FactSet data is $14.08 a share, representing a gain of just 6 percent from its price on rating date.

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