3 Short-Squeeze Stocks to Buy for 100% Upside Potential


  • These are the short-squeeze stocks to buy for a big rally from undervalued levels.
  • Blink Charging (BLNK): Stellar revenue growth and guidance for adjusted EBITDA break-even by December 2024.
  • Marathon Digital (MARA): Aggressive hash rate capacity expansion that’s likely to translate into robust cash flow growth as Bitcoin (BTC-USD) trends higher.
  • C3.ai (AI): The stock in a consolidation range and as generative AI agreements increase, revenue growth is likely to accelerate.
short-squeeze stocks - 3 Short-Squeeze Stocks to Buy for 100% Upside Potential

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Short-squeeze stocks can be ferocious when they rally. Carvana (NYSE:CVNA) had a high short interest, and the stock has skyrocketed by 800% in the last 12 months.

While there are traders and speculators following short-squeeze stocks, the rally is always backed by positive fundamental developments. I want to make the point that investors should look at possible positive catalysts before considering exposure to stocks with high short interest.

There are multiple examples of stocks with a high short interest and continuing to trend lower. For example, Lucid Group (NASDAQ:LCID) stock has continued to correct, and the outlook remains bearish. This is primarily due to the absence of any positive business catalyst.

Identifying short-squeeze stocks is not simply a function of heavy short-interest build-up. This column focuses on three stocks that seem poised for a 100% short-squeeze rally before the end of 2024.

Short-Squeeze Stocks: Blink Charging (BLNK)

a blink charging station, BLNK stock
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Blink Charging (NASDAQ:BLNK) stock has been depressed for an extended period. However, it’s worth noting that in the last five months, BLNK stock has remained largely sideways. With positive business developments, a breakout on the upside seems imminent. Further, with a short interest of almost 33%, a big short squeeze is likely.

The first positive is that Blink Charging is on a high-growth trajectory. For Q3 2023, revenue increased by 152% on a year-on-year basis to $43.4 million. Further, the company has provided preliminary results for Q4, and full-year numbers will likely be ahead of the guidance.

The second positive is that Blink Charging has reaffirmed its guidance to deliver positive adjusted EBITDA by December 2024. This is significant with intense industry competition, and I expect margin expansion to be sustained in the next few years. Increasing services (recurring) revenue is likely to support the case for sustained margin expansion.

Amidst these positives, BLNK stock looks oversold and undervalued. I would not be surprised if the stock skyrockets by 100% before the end of 2024.

Marathon Digital (MARA)

In this photo illustration the Marathon Digital Holdings (MARA) logo seen displayed on a smartphone screen
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Marathon Digital (NASDAQ:MARA) stock is another name primed for a short-squeeze rally of 100% before the end of the year. It’s worth noting that Bitcoin (BTC-USD) has been surging higher. The digital asset will likely trade at new all-time highs relatively soon. Bitcoin miners like Marathon are positioned to benefit from stellar revenue growth and cash flow upside.

As of January, Marathon Digital reported cash and digital assets of $1 billion. High financial flexibility for aggressive mining capacity expansion is one reason to like the Company. To put things into perspective, Marathon reported an installed hash rate capacity of 26.7EH/s as of January, which was higher by 143% on a year-on-year basis.

Marathon Digital plans to boost capacity to 50EH/s by the end of 2025. Therefore, capacity expansion is likely to be significant. If Bitcoin trades at all-time highs, the positive impact on cash flows will drive the stock higher.

C3.ai (AI)

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C3.ai (NYSE:AI) is another stock with high short interest poised for a big rally. The short interest in AI stock is at 38%, and it’s worth mentioning here that the stock has remained sideways in the last six months.

For Q2 2024, C3.ai reported revenue growth of 17% on a year-on-year basis to $73.2 million. It’s worth noting that subscription revenue constituted 91% of total revenue. Besides steady revenue growth, C3.ai closed 20 new agreements for C3 Generative AI during the quarter. Qualified opportunity pipeline with partners has also increased by 75% on a year-on-year basis.

With applications in sectors like manufacturing, financial services, and defense, Generative AI is likely to continue driving growth. Conversely, C3.ai has guided an operating loss of $125 million for 2024. However, I believe that losses will narrow as new agreements are signed and revenue growth accelerates. This is likely to be a key catalyst for the stock trending higher.

On the date of publication, Faisal Humayun did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Faisal Humayun is a senior research analyst with 12 years of industry experience in the field of credit research, equity research and financial modeling. Faisal has authored over 1,500 stock specific articles with focus on the technology, energy and commodities sector.

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