5 Stocks About To Short Squeeze As Market Rebounds

The article identifies five stocks – Abercrombie & Fitch (ANF), Applied Digital (APLD), Airship AI Holdings (AISP), NuScale Power (SMR), and Reservoir Media (RSVR) – as potential short squeeze candidates based on high short interest, strong Benzinga Edge Growth Scores, and upcoming catalysts such as earnings reports or technical breakouts; these catalysts could trigger rapid price increases as short sellers cover their positions, though the likelihood and magnitude of such squeezes remain uncertain.

Analysis

The article identifies five U.S. equities—Abercrombie & Fitch (ANF), Applied Digital (APLD), Airship AI Holdings (AISP), NuScale Power (SMR), and Reservoir Media (RSVR)—as prime candidates for potential short squeezes. This selection is based on a combination of high Benzinga Edge Growth Scores (all above 96), significant short interest (ranging from 18.09% for RSVR to an exceptionally high 71.66% for AISP), and proximate catalysts. For ANF, with 20.93% short interest, catalysts include potential tariff reductions, a recent technical breakout (14-day EMA crossing 21-day EMA), and May 28 earnings; the stock trades at 7.5 times earnings despite a 40% YTD decline. APLD, an AI infrastructure firm with 30.54% short interest, shows bullish technicals (EMA crossover) and analyst backing (average target $9, 55% upside) despite a recent revenue miss, with a broader cryptocurrency bull market as a potential tailwind. AISP, a small-cap AI data management firm, exhibits the highest short interest at 71.66% and recently reported a 25% revenue surprise for its third consecutive quarter of revenue growth, pushing the stock above key moving averages. SMR, a nuclear small module reactor operator, has 18.98% short interest and benefits from the AI energy demand narrative; it recently posted a 289% revenue surprise and 26% EPS beat on May 12, leading to a 37% stock price increase in the subsequent five sessions and a technical breakout. RSVR, a small-cap music media company with 18.09% short interest, has an upcoming earnings report on May 28 and shows early bullish technical signals with its price moving above short-term EMAs. While the article highlights the potential for exponential profits, it also implicitly acknowledges the speculative nature of these plays, as indicated by the market recovery context and the inherent volatility of short squeezes.

Key Decisions for Investors

• Investors should recognize the highly speculative nature of these short squeeze candidates, where high short interest signals both potential for rapid appreciation and significant underlying bearish sentiment; capital allocation should reflect this elevated risk-reward profile.
• Monitor upcoming earnings reports for Abercrombie & Fitch (ANF) and Reservoir Media (RSVR) on May 28, as these are highlighted as key catalysts that could trigger significant price movements in these heavily shorted stocks.
• For stocks like NuScale Power (SMR) and Airship AI (AISP) that have already reported positive catalysts (strong earnings, revenue surprises), evaluate the sustainability of the recent price momentum and technical strength (e.g., SMR's breakout above 50-day and 200-day SMAs) against the backdrop of their respective short interest levels.
• Consider the technical signals mentioned, such as EMA crossovers for ANF and APLD, and breakouts above key moving averages for AISP and SMR, as potential entry or validation points, but be prepared for the swift reversals common in short squeeze scenarios by employing diligent risk management strategies.