Everspin Technologies (NASDAQ:MRAM) shares fell 8% on Tuesday after short seller Kerrisdale Capital announced it had taken a short position in the company, asserting that recent investor enthusiasm is not supported by Everspin’s business fundamentals.
Kerrisdale’s critique centers on the view that Everspin plays little role in the AI infrastructure buildout that has spurred the semiconductor market. The firm said Everspin’s largest end market is casino gaming and slot machines, rather than hyperscalers and AI servers that account for the bulk of AI memory spending.
The short seller further argued that MRAM addresses different technical challenges than the memory architectures currently powering AI clusters. According to Kerrisdale, high-bandwidth memory and DRAM are the primary choices for AI workloads because they deliver the scale and throughput those systems require. By contrast, MRAM is used mainly in industrial and embedded systems where data persistence is more important than large-scale throughput.
Kerrisdale noted that, despite being commercially available for about two decades, Everspin’s revenue has remained in a roughly $50 million to $65 million range for years. The firm characterized MRAM adoption as substitution-driven, replacing existing memory technologies with incremental improvements rather than creating new demand or enabling new computing architectures.
On valuation, Kerrisdale said Everspin trades at approximately 10 times estimated 2027 sales and roughly 38 times estimated 2027 EBITDA. The short seller added that actual AI memory companies trade at lower multiples despite faster growth rates, in Kerrisdale’s view.
The report also called attention to recent trading patterns, pointing out that volume spiked from a few million dollars to more than $1 billion in a single session, even though Kerrisdale saw no corresponding change in Everspin’s business. The firm reported that the CEO, CFO, and two directors sold shares during the rally.
Kerrisdale set a $14 per share price target for Everspin, which it said implies about 63% downside from current levels at the time of the report. The short seller noted that the stock had surged more than 300% as investors targeted companies associated with memory and AI.
Market context and immediate reaction
Investors reacted to Kerrisdale’s disclosure with a single-session decline in Everspin shares and elevated trading volume. The short seller’s assessment focused on end-market exposure, product fit for AI workloads, historical revenue stability, valuation multiples relative to projected 2027 metrics, and insider sales during the recent rally.