AsianFin -- Short sellers have profited handsomely from bets against some of the market’s leading AI-focused tech stocks, capitalizing on a recent market pullback as investors question the sustainability of the AI-driven rally.

On Wednesday, tech stocks slipped for a second consecutive day, with the Nasdaq Composite (^IXIC), heavily weighted toward technology, declining 0.7% and leading losses among major indexes. The Nasdaq’s two-day drop totaled 1.5%, reflecting mounting concerns over lofty valuations in the AI sector.

Data from S3 Partners shows that short sellers targeting a basket of AI-linked companies earned $5.6 billion over the past two trading sessions, underscoring the rising influence of bearish wagers amid market volatility.