Since the beginning of November, undervalued market sectors like the energy sector and the financial sector have outperformed the high-growth tech sector in the U.S. market. This is leading some investors to wonder whether tech’s more than decade-long leadership position may finally be coming to an end.

With 2021 just around the corner, S3 Partners analyst Ihor Dusaniwsky said short sellers are throwing in the towel on their bearish bets on tech stocks.

Dusaniwsky said cumulative short interest in the U.S. market is now $995 billion, but there has been more than $22.7 billion in net short covering in the past 30 days. In fact, every market sector other than real estate has experienced net short-covering heading into the end of the year.

Most Covered Shorts: Some big-name tech stocks are among the five stocks that have experienced the most net short covering in the past 30 days, according to S3:

  • Alphabet, $891.7 million in short-covering
  • Netflix, $645.1 million in short-covering
  • Intel, $586.6 million in short-covering
  • Zoom Video Communications, $543.3 million in short-covering
  • Okta, $481.4 million in short-covering

Google parent company Alphabet has more than $8.3 billion in total short interest between its A-class and C-class shares, making it the sixth most shorted company in the market. However, despite multiple antitrust lawsuits filed against the search giant in 2020, short sellers are dialing back their bets against Alphabet shares heading lower in 2021.

In contrast, some short sellers also doubled down on bearish bets against others stocks. Dusaniwsky said short sellers have added $1.6 billion to their bearish bets against Tesla in the past 30 days, making it the most heavily shorted stock of December. Tesla is the most shorted stock in the world by a wide margin, with $32.3 billion in total short interest, according to Dusaniwsky.

“TSLA’s short interest is slightly less than three times the total short interest of the next three largest shorts (AAPL, BABA, and AMZN) combined,” he said.

Benzinga’s Take: Betting against high-growth tech stocks has been a losing recipe for years, but sky-high valuations in some stocks have short sellers now drawing comparisons to 1999’s dot-com bubble.

The December trading action among short sellers seems to suggest they aren’t anticipating a wide-scale tech bloodbath in the near future. Rather, they are picking and choosing individual names within the sector that may have gotten overheated in 2020.

This story originally appeared on Benzinga.

© 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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