(Bloomberg) -- The surge in technology stocks that’s caused renewed losses for short sellers this year looks to be running out of steam, encouraging bears to maintain their bets against long-time targets such as Tesla Inc., Apple Inc. and Meta Platforms Inc.

Ten of the most-shorted stocks this year delivered almost $17 billion in combined mark-to-market losses for bears through Thursday, according to data-analytics firm S3 Partners. Tesla, which has surged 67% so far in 2023, leads the group by dealing a $7.2 billion blow to traders shorting the stock. The electric-car maker is followed by Nvidia Corp., Apple, Meta, Amazon.com Inc. and Microsoft Corp.

The recent pain for short sellers is in contrast to 2022 when combined paper gains from the top 10 bearish bets were $57 billion, according to S3. Investors last year punished the most speculative companies, such as those with elevated price-earnings ratios, as interest-rate hikes sapped the market’s risk appetite.

“If you shorted unprofitable names with high PEs you made a lot of money; if you are short right now you are getting squeezed real hard,” said Bob Doll, chief investment officer at Crossmark Global Investments. He’s co-manager of the Steward Equity Market Neutral Fund, which had short positions in more than 80 companies, including software developers Palantir Technologies Inc. and Cloudflare Inc., as of Dec. 31.

Tesla has always been a big short-seller target. At the end of last year, it was the most-shorted stock and traders who had bet against it were sitting on paper gains of about $16 billion, according to S3.

Things changed this year as appetite returned for the growth and tech stocks that slumped in 2022. The stock has surged this year and the Nasdaq 100 Index flirted with bull-market territory.

Yet skeptics say this rally will soon fizzle out, making many highly valued stocks attractive short-seller targets again.

The market’s valuation is full, growth drivers at big tech companies have been slowing and their stocks are “still extremely expensive,” said Brad Lamensdorf, a manager of the AdvisorShares Ranger Equity Bear ETF.

The Nasdaq 100 trades at 23 times forward earnings, up from about 19 times four months ago, according to data compiled by Bloomberg. Meanwhile, results from the largest technology and internet companies showed that Apple, Microsoft, Alphabet Inc., Amazon.com and Meta missed estimates by an average of about 8%, according to data from Bank of America.

“The risk-reward is very poor in the market, which makes hedging or short selling attractive,” said Lamensdorf.

Tech Chart of the Day

Strong travel demand drove a record rally in Airbnb Inc. shares last week after the home-sharing company delivered its highest-ever annual profit and issued an optimistic outlook to begin 2023. The stock climbed about 21% through Friday’s close, its biggest weekly gain since the 2020 initial public offering. The move added about $15 billion to Airbnb’s market value.

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(Updates at the open.)

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