Celsius Stock Hits 52-Week Highs After Pepsi Increases Stake

PepsiCo has increased its stake in Celsius Holdings Inc. through a $585 million deal, propelling CELH shares to new 52-week highs and extending its impressive 140% year-to-date rally. This strategic investment underscores PepsiCo's deepening commitment to the energy drink sector and Celsius's strong market momentum, a sentiment echoed by heightened call option activity and significant short interest that suggests potential for further upside.

Analysis

PepsiCo's increased investment of $585 million in Celsius Holdings Inc. has catalyzed a significant rally, pushing CELH stock to a new 52-week high of $63.49 and extending its year-to-date gain to 140%. This strategic move by a major beverage distributor provides strong validation for Celsius's growth trajectory and market position, following an already impressive 17.3% post-earnings surge on August 7. The market's bullish conviction is further evidenced in the options market, where call volume has doubled its intraday average, with notable buying activity in out-of-the-money weekly calls. Critically, the stock's Schaeffer's Volatility Index (SVI) of 42% ranks in just the 2nd percentile of its annual range, suggesting that options are attractively priced as traders are not pricing in high volatility expectations. This is coupled with a substantial short interest, representing 12.5% of the available float, which equates to three days of buying power and creates a clear potential for a short squeeze that could fuel further upside.

Key Decisions for Investors

• Given the strong fundamental validation from PepsiCo, positive technical momentum, and bullish options flow, investors may consider initiating or adding to long positions in CELH.
• The combination of high short interest (12.5% of float) and low implied volatility presents a tactical opportunity, as a potential short squeeze could amplify gains, and call options appear relatively inexpensive to express a bullish view.
• Despite the positive outlook, investors should acknowledge the stock's 140% year-to-date run-up and consider implementing risk management strategies, such as trailing stops, to protect capital in the event of a sentiment shift or profit-taking.