5 Stocks About To Short Squeeze As Market Rebounds

The term ‘short squeeze' entered retail investors' vocabulary in January 2021 when GameStop GME went parabolic following a coordinated effort by traders on Reddit. Short sellers had attempted to profit from GameStop’s demise by borrowing shares from their broker and immediately selling on the open market.

The selling and the company’s lagging business would drive the price down, so the short sellers were hoping to buy the shares back later for less and pocket the difference. Instead, Reddit traders and a stronger-than-expected business pushed the price up. This sent short-sellers scrambling to buy shares back and close out their positions, causing the stock to go up even faster.

These “short squeezes” often peter out as quickly as they materialize, but profits can be exponential for those who find entry points before the catalyst.

Now that markets have recovered from April’s tariff drama, let’s take a look at some still-downbeat stocks primed for a short squeeze.

Here are five stocks with huge potential for a short squeeze run-up.

Each stock on this list has a minimum Benzinga Edge Growth Score of 96, short interest over 15% (meaning at least 15% of the float is sold short), and a potential catalyst on the horizon that could spark the fire.

Abercrombie and Fitch Co.

• Benzinga Edge Growth Score: 99.21
• Short Interest: 20.93%
• Catalyst: Tariff reductions, technical breakout

Abercrombie and Fitch ANF made our list earlier as a stock to watch in March when the Relative Strength Index (RSI) dropped below 30, triggering an Oversold signal. But then Liberation Day happened, and stocks plunged, especially those exposed to Chinese manufacturing like ANF. However, now that the harshest tariffs have been rolled back and the odds of a recession are dropping, apparel stocks could be primed for a comeback, and Abercrombie is still flashing bullish technical signals. The stock has been down over 40% year-to-date (YTD) but up 13% in the last 30 days.

The stock recently saw its 14-day exponential moving average (EMA) cross the 21-day EMA, indicating short-term bullish momentum. ANF's price has struggled to break above this level since President Trump announced his reciprocal tariffs, but now the breakout has occurred, and the RSI is still cooperating by staying below 70. ANF shares trade at just 7.5 times earnings, and the company still has some of the best margins in the apparel business. It also reports earnings on May 28, so a potential short-squeeze catalyst awaits.

Applied Digital Corp.

• Benzinga Edge Growth Score: 98.02
• Short Interest: 30.54%
• Catalyst: Cryptocurrency bull market, technical breakout

Applied Digital APLD is an artificial intelligence "picks and shovels" play that focuses on hosting data centers and cloud services for AI, crypto mining, and high-performance computing firms. The company has a $1.27 billion market cap and has grown its annual revenue each year since it went public, but it has yet to reach profitability.

Of course, we aren't worried about the path to profitability when hunting short squeezes, and APLD shares have some bullish technical signals to go along with over 30% short interest. The stock dipped following a revenue miss on the April 14 earnings report, but shares have been shrugging off the bad report and moving higher. Like ANF, the stock chart shows the 14-day EMA crossing the 21-day EMA, with the price hugging the 14-day EMA as support. Analysts are still bullish on the stock, with Needham, Cantor Fitzgerald, and HC Wainwright defending their Buy ratings following earnings. The average price target between these three is $9, indicating a potential upside of over 55%.

Airship AI Holdings Inc.

• Benzinga Edge Growth Score: 97.70
• Short Interest: 71.66%
• Catalyst: Earnings

Airship AI AISP is a small-cap firm offering data management solutions to clients using AI platforms. AISP has some of the classic hallmarks of a short squeeze: a tiny market cap, a thinly traded float that was massively sold short, and a potential catalyst unfolding.

AISP has over 71% short interest, the highest on our list by more than 40%. When stocks are shorted to this level, there's usually a good reason, and a parabolic GameStop-esque rally isn't in the cards. However, AISP reported a 25% revenue surprise to the upside during its May 15 earnings report, sending the stock up 4% in after-hours trading. It was the third straight quarter the company had increased revenue, and it’s now trading above its 50-day and 200-day simple moving averages (SMAs) for the first time since February.

NuScale Power Corp. 

• Benzinga Edge Growth Score: 96.87
• Short Interest: 18.98%
• Catalyst: Earnings, technical breakout

Nuclear power has been grabbing lots of headlines lately as Google reached an agreement to open three nuclear sites to power AI data centers. The AI energy boom will require alternative sources, and nuclear power is quickly becoming a revitalized choice. Companies like NuScale SMR, which operates the only approved small module reactors (SMRs), could benefit most from this change of heart.

NuScale has a pair of catalysts working in its favor: its partnership with AI data center provider Standard Power and a blowout earnings report. On May 12, NuScale reported a top and bottom-line earnings beat, including a 289% revenue surprise to the upside. The company also beat analysts’ EPS estimates by 26%, and the stock is now up 37% in the last five sessions. The breakout above the 50-day and 200-day SMAs indicates more potential upside ahead, especially if the 50-day heads back over the 200-day SMA and triggers a Golden Cross.

Reservoir Media Inc.

• Benzinga Edge Growth Score: 98.07
• Short Interest: 18.09%
• Catalyst: Earnings, technical breakout

Reservoir Media  RSVR is a small-cap music media firm that records and publishes material from various independent artists. The company both signs new artists and acquires existing music catalogs. RSVR reports earnings on May 28, and technical indicators are signaling bullish activity under the surface.

RSVR has been declining since February but recently began poking its head above the 14-day and 21-day EMAs, indicating a potential support level is forming. As of this writing, shares are trading above both EMAs with the RSI well below the oversold threshold of 70. With earnings coming up, RSVR is the type of small-cap stock with high short interest that could surge higher with an upside surprise. Analysts thinly cover the stock, but B. Riley Securities did imbue a Buy rating with a $12.50 price target back on Halloween, which is nearly 70% higher than current prices.

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