3 Short-Squeeze Stocks Set for a June Rally
In the dynamic stock market landscape, the rise of meme stocks has been a game-changer. Online platforms such as Reddit have empowered individual traders to congregate, discuss, and rally around unlikely wagers, often leading to an uptick in the best short-squeeze stocks. However, navigating this landscape calls for prudence.
It’s imperative to understand that stocks under heavy short pressure have fundamental reasons for their precarious position.
Although the contrarian attraction of these stocks can be enticing, the risk of a continued slide is always at the doorstep. Therefore, a balanced approach is critical in tracking upcoming short-squeeze stocks set for a June rally.
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That said, a few major examples of short-squeeze stocks promise both a potential squeeze and robust underlying fundamentals. These top short-squeeze stocks to buy not only have solid business backing but also hold the potential to reward investors quickly.
C3.ai (AI)
Source: shutterstock.com/Tex vector
Float Shorted (%): 35.7%
C3.ai (NYSE:AI) is an enterprise AI software titan racing full-speed ahead on the path to digital transformation.
Despite a roller-coaster journey marked by its fluctuating financials, delivering a blend of hits and misses. Nevertheless, on the meteoric rise of AI technology this year, AI stock has generated a commendable return of over 70% since the start of the year.
Moreover, investors will feel upbeat over C3.ai announcing key partnerships with tech heavyweights like Google and Amazon (NASDAQ:AMZN).
These alliances have enabled the accessibility of its Generative AI offerings through the Google Cloud Marketplace and broadening its market footprint via Amazon. This solution provides seamless access to diverse enterprise and open-source data.
C3.ai’s recent financials have been a mixed bag, though with a tinge of positivity. The company reported a narrower-than-anticipated loss per share and even surpassed revenue expectations, albeit with a modest growth of 0.1%.
Its full-year forecast is ahead of its market expectations. Combined with its CEO Tom Siebel’s vision of a $600 billion addressable market for AI, C3.ai could be in for an incredible run ahead.
The LoveSac Company (LOVE)
Source: JHVEPhoto / Shutterstock.com
Float Shorted (%): 33.9%
The LoveSac Company (NASDAQ:LOVE), known for its innovative casual furniture, saw its shares nosedive last year. The company known for its modular furniture system called Sactionals and foam beanbag chairs continues to resonate with its massive customer base.
A testament to its unmatched prowess is its robust fundamentals, where its revenue growth has outpaced analyst expectations in the past 14 consecutive quarters. In its most recent quarter, it delivered a lighter-than-expected loss and sales growth of more than 9%.
Despite the stumble, Wall Street analysts rally behind LOVE, unanimously branding it as a strong buy. They predict an optimistic 120% upside from its current levels, indicating a potential rebound on the horizon.
This sentiment underscores the belief in Lovesac’s ability to recover and thrive over the long term.
Upstart (UPST)
Source: T. Schneider / Shutterstock.com
Float Shorted (%): 35.6%
Upstart (NASDAQ:UPST) is a popular AI-powered lending platform with stellar growth during the 2021 boom.
However, recent interest rate hikes by the Federal Reserve and ensuing uncertainties have made banks and other institutions cautious about leveraging the platform.
Despite these headwinds, Upstart’s first quarter results have painted a picture of relentless growth, with revenues of $103 million beat expectations by a healthy $3.2 million and an adjusted loss per share of 47 cents that fared better than anticipated.
It posted an optimistic second-quarter guidance, which foresees improved revenue and shrinking losses.
Aiming for approximately $135 million in sales and a net loss of around $40 million, the company has cut costs, particularly in sales and marketing, leading to a year-over-year decrease of 15% in total operating expenses.
Furthermore, as I mentioned in a recent article, its foray into the home equity market could be pivotal. With mortgage originations nearing a staggering $3 trillion annually, even a modest market share could significantly boost the company’s revenue.
On the date of publication, Muslim Farooque did not have (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.
Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.
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