Apple short interest has risen steadily in recent weeks, even before the downgrade from Mizuho. There was a feeding frenzy for short-sellers, however, as the stock tumbled amid concern about the valuation of mega-tech stocks. Now one Apple perma-bull has outright blamed the FANG acronym and seems to also place some blame on the more recent FAAMG acronym for what he says is the company’s “depressed valuation.”

Apple short interest on the rise

Financial analytics firm S3 Partners reported earlier this week that Apple short interest was already rising before Mizuho Securities’ downgrade. Research head Ihor Dusaniwsky said short-sellers had been building their positions since the end of May. In fact, Apple short interest surpassed $9 billion for the first time since May 2016. Apparently, they’ve been bettering that investors would sell Apple stock in May and go away.

After the increase in Apple short interest, it was the world’s third biggest short as of Friday at $9.1 billion. The stock only trails Alibaba Group with a global short position of $16.7 billion and Tesla with a position of $10.5 billion. Apple short interest did come down a bit through Friday, however, as it peaked at $9.7 million toward the end of May. However, Apple short interest is up 54% or $3.2 billion year over year.

Short-sellers also started building their latest positions suddenly, according to S3 Partners, as Dusaniwsky reported that most of the increase came in April. He said they added $2.3 billion in less than six weeks.

Apple short interest gradually ticks lower

Despite the sudden increase in Apple short interest, he added that over the last year and a half, it has been trending downward, although with “occasional pops in short volume that evaporated as quickly as they arrived.”

Between 2009 and 2011, Apple short interest averaged only $3.2 billion as its stock price grew nearly five-fold. Then between 2011 and 2015, the iPhone maker started to test the $100 per share level before breaking through and peaking at $133 in February 2015. According to Dusaniwsky, Apple short interest also hit some key milestones between 2011 and 2015 and averaged more than $9.1 billion. It reached $12.1 billion in 2012 and then peaked the next year at $18.4 billion, and it was then that short-sellers started to cover their positions, he explained.

Since hitting $12.8 billion in November 2015, Apple short interest has averaged just $6.1 billion.

Are the FANG acronym and FAAMG acronym to blame for Apple’s decline?

Over the last couple of years, there’s been much ado about the FANG acronym: Facebook, Amazon, Netflix and Google/Alphabet. Apple stock didn’t perform well enough to make it into that acronym, but its recent tear secured it a place in the new FANG acronym, which is FAAMG. The FAAMG acronym consists of: Facebook, Apple, Amazon, Microsoft and Google/Alphabet.

In a note to investors dated June 12, Drexel Hamilton analyst Brian White, an Apple perma-bull with a $202 price target, blamed the FAAMG acronym for the most recent pullback in the stock. He argued that the stock was “hijacked on Friday with concerns that the leading technology stocks have run to far this year and a comparison to the ‘FANG’ stocks.” However, he sees nothing but a buying opportunity, especially as investors remained focused on the iPhone 8 and the increased capital return. He still sees Apple is “among the most underappreciated stocks in the world.”

The one and only Apple

He terms Apple’s comparison to the members of the FANG acronym a “specious argument” because the group has significantly outperformed Apple over the last five years. He explained that the average gain for the stocks in the FANG acronym is 674% over the last five years, while Apple has “only” risen 100% and the S&P 500 has gained 84%. He also seems to blame the newer FAAMG acronym because Apple is being lumped in with stocks that have significantly outperformed it in recent years. He noted that even Microsoft has outperformed Apple with a 175% gain over the same timeframe.

Apple has gained 29% this year so far, compared to the 28% increase for the FANG group. White feels that Apple’s exclusion from the FANG acronym over the last several years has left investors overly cautious on the iPhone maker, resulting in a “depressed valuation.” As a result, he feels Apple stock has lots of catching up to do and expects its valuation to expand.

So in short, White argues that the FANG acronym is to blame because Apple’s exclusion made investors cautious, while the FAAMG acronym is to blame because its inclusion groups it with stocks it shouldn’t be compared to.

After stabilizing and rising a bit on Tuesday, shares of Apple ticked lower by as much as 0.5% to $145.86 during regular trading on Wednesday.