Aditya Bhave, BofA Securities head of US Economics, joined ‘Power Lunch’ on CNBC on April 17 to talk about whether tariffs are ultimately inflationary, disinflationary, or deflationary. Aditya Bhave responded that the impact depends on the magnitude of the uncertainty shock. He explained that tariffs are generally stagflationary, which means that they contribute to both inflation and economic stagnation. However, he also emphasized that it’s not just the content of the trade policy announcements that matters, but also the disruptive way in which these policies have been communicated, which has increased uncertainty for businesses. He noted that there is a scenario where the uncertainty caused by these policies could outweigh their stagflationary effects, making tariffs disinflationary instead. Bhave also referenced Fed Chair Jerome Powell’s recent hawkish remarks and drew a parallel to Powell’s stance during the 2021–2022 rate hiking cycle.

He highlighted Powell’s assertion that sustained full employment is not possible without price stability, which is a justification that Powell previously used for aggressive rate hikes even during a technical recession. Bhave believes the Fed is likely to maintain its focus on price stability and continue its current policy approach in the near term. Earlier during the COVID-19 pandemic, the Fed and Powell in particular, notably responded to tariff-induced supply chain disruptions by aggressively stimulating the economy. Bhave argued that this aggressive response came after and not during the initial supply chain disruptions, and that while the Fed may have acted a bit late, it ultimately raised rates sharply by 425 basis points in a single year. He does not expect the Fed to repeat such aggression, but believes that the case for holding rates steady is strong right now.

Our Methodology

We first sifted through stock screeners to find companies with a short interest between 10% and 25%. We then selected the 10 stocks that were the most shorted as of April 16, but at the same time were popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q4 2024. The hedge fund data was sourced from Insider Monkey’s database, which tracks the moves of over 1000 elite money managers.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

10 Best High Short Interest Stocks to Buy Now

10. Brinker International Inc. (NYSE:EAT)

Short % of Float As of April 16: 15.45%

Number of Hedge Fund Holders: 51

Brinker International Inc. (NYSE:EAT) owns, develops, operates, and franchises casual dining restaurants in the US and internationally. It operates and franchises Chili’s Grill & Bar and Maggiano’s Little Italy restaurant brands. It also operates virtual brands, like It’s Just Wings.

In FQ2 2025, the Chili’s brand saw a 31.4% year-over-year increase in same-restaurant sales. This growth was well-balanced and attracted a new generation of guests while seeing existing guests visit more frequently. This momentum indicates the success of the investments made over the past 3 years in marketing, operational simplification, labor, and facility improvements. Notably, Chili’s has become the number one casual dining chain in the industry for 2024, according to Circana Crest traffic share data.

This performance comes from improvements like the removal of 13 menu items and 12 pantry SKUs year-to-date to focus on doing fewer things. Food quality has also been upgraded. Marketing efforts are driving traffic and guest counts, especially among younger demographics. For instance, the Triple Dipper social media campaign now represents 14% of total Chili’s sales in Q2, which is a 3-point increase from Q1. Such moves demonstrate Brinker International Inc.’s (NYSE:EAT) growing position in the market.

9. PENN Entertainment Inc. (NASDAQ:PENN)

Short % of Float As of April 16: 13.85%

Number of Hedge Fund Holders: 51

PENN Entertainment Inc. (NASDAQ:PENN) provides integrated entertainment, sports content, and casino gaming experiences. It operates through five segments: Northeast, South, West, Midwest, and Interactive. It has a portfolio of casinos, racetracks, and online sports betting in various jurisdictions.

The company’s Interactive segment reported a revenue of $142 million in Q4 2024. The Interactive division is specifically centered around its ESPN BET online sports betting platform and its expanding Hollywood iCasino products. ESPN BET utilizes a strong brand partnership with ESPN and a fully owned technology stack.

PENN Entertainment Inc.’s (NASDAQ:PENN) omnichannel strategy views the digital space as an opportunity for database growth by attracting younger demographic. Since this focus, the company’s digital database has grown to 4 million new members, with ~34% of these members living within 50 miles of a PENN property. PENN anticipates approaching break-even in 2025, with each quarter delivering a lower loss sequentially, concluding in the first profitable quarter in Q4 2025 since the launch of ESPN BET.

8. Paramount Global (NASDAQ:PARA)

Short % of Float As of April 16: 11.07%

Number of Hedge Fund Holders: 54

Paramount Global (NASDAQ:PARA) is a media, streaming, and entertainment company that operates through TV Media, DTC, and Filmed Entertainment segments. It provides production, distribution, and advertising solutions. It operates in both the New York and San Francisco commercial real estate markets, but New York City drives most of its revenue

In Q4 2024, ~57,000 square feet were leased in New York, which contributed substantially to the total of 109,000 square feet leased company-wide. Although this quarterly leasing in New York didn’t meet revised internal targets, the pipeline remains robust, with strong interest from tenants, particularly in the financial services and legal sectors.

Paramount Global (NASDAQ:PARA) is encouraged by the current level of interest in its New York portfolio. After Q4, a new lease for 131,000 square feet was completed at 900 Third Avenue, which addresses both vacant and soon-to-be-vacant floors. The pipeline continues to grow, with ~350,000 square feet of leases out, half for vacant space and the remainder for space expiring in 2025 and 2026.

7. LYFT Inc. (NASDAQ:LYFT)

Short % of Float As of April 16: 11.91%

Number of Hedge Fund Holders: 55

LYFT Inc. (NASDAQ:LYFT) operates a peer-to-peer marketplace for on-demand ridesharing in the US and Canada. It operates multimodal transportation networks that offer access to various transportation options through the Lyft platform and mobile-based applications. It provides a ridesharing marketplace, a car rental program for drivers, and a network of shared bikes & scooters.

In 2024, the company’s Ridesharing segment achieved all-time highs in rides, riders, and driver hours. This success propelled Lyft to its highest market share since 2022 by the end of January of the following year. In Q4, Lyft recorded its highest number of driver hours in company history, which was driven by improved driver retention and earnings. In total, drivers earned ~$9 billion on the platform in 2024.

The company’s commitment to improving the ridesharing experience is evident in features like the on-time pickup promise and the expansion of Women+ Connect, which has facilitated more than 50 million rides. A Q4 survey indicated that driver preference for LYFT Inc. (NASDAQ:LYFT) was 16% higher than its largest competitor. Lyft is also forming partnerships to further grow its ridesharing segment. For instance, the DoorDash partnership supported ~8 million rides in Q4 2024.

6. Merus (NASDAQ:MRUS)

Short % of Float As of April 16: 10.79%

Number of Hedge Fund Holders: 56

Merus (NASDAQ:MRUS) is a clinical-stage immuno-oncology company that develops antibody therapeutics in the Netherlands. Its bispecific antibody candidate pipeline includes BIZENGRI, which received FDA approval as the first and only treatment indicated for adults with advanced unresectable or metastatic pancreatic adenocarcinoma or NSCLC that harbor a neuregulin 1 (NRG1) gene fusion.

This approval was granted under accelerated approval based on overall response rate (ORR) and duration of response (DOR) observed in clinical trials. Continued approval for these indications may be contingent upon verification and description of clinical benefit in confirmatory trials. For BIZENGRI’s commercialization and revenue generation in the US, Merus has exclusively licensed the rights to Partner Therapeutics.

The success of this candidate will depend on its adoption by physicians. The requirement for confirmatory trials to verify the clinical benefit could also impact the long-term success and continued approval of BIZENGRI. Although collaboration revenue for 2024 decreased to $36.1 million compared to $43.9 million in 2023, the approval and subsequent commercialization of BIZENGRI represent a new revenue driver moving into 2025 and beyond.

TimesSquare Capital Management U.S. Small Cap Growth Strategy stated the following regarding Merus N.V. (NASDAQ:MRUS) in its Q2 2024 investor letter:

“Our preferences among Health Care stocks are those companies providing novel therapies for unmet needs that deserve premium pricing, or specialized service providers. A new addition this quarter is Merus N.V. (NASDAQ:MRUS), a clinical-stage immune-oncology biotechnology company. Their pipeline consists of several programs targeting solid tumors with various bispecific antibodies.”

5. Lumentum Holdings Inc. (NASDAQ:LITE)

Short % of Float As of April 16: 20.06%

Number of Hedge Fund Holders: 57

Lumentum Holdings Inc. (NASDAQ:LITE) manufactures and sells optical and photonic products. It operates through two segments: Cloud & Networking and Industrial Tech. It serves customers in semiconductor device, solar cell, display, EV, and battery manufacturing markets, along with broader materials processing and precision micromachining end-markets.

In FQ2 2025, the company’s Cloud and Networking segment generated $339.2 million in revenue, which was up 20% sequentially and 18% year-over-year. This segment is expanding because of a booming cloud market. Lumentum Holdings Inc.’s (NASDAQ:LITE) photonics innovations are essential for the high-speed, low-latency, and energy-efficient data transmission which is required in modern data centers, especially for AI applications.

Lumentum is a leader in Electro-absorption Modulated Lasers (EMLs), and in Q2, it achieved a record in EML unit shipments and began delivering new and more efficient 200G lane speed EMLs to multiple customers. This positions it to gain market share in next-gen 800G and 1.6T transceivers. On March 24, Raymond James analyst Simon Leopold upgraded the stock’s rating from Outperform to Strong Buy, while lowering its price target to $82 from $96.

Invesco Small Cap Value Fund stated the following regarding Lumentum Holdings Inc. (NASDAQ:LITE) in its Q4 2024 investor letter:

“Lumentum Holdings Inc. (NASDAQ:LITE): The telecommunications equipment maker reported better-than expected revenue and earnings for its recent quarter, along with record orders for its data communications laser chips used in data center applications.”

4. Etsy Inc. (NASDAQ:ETSY)

Short % of Float As of April 16: 19.45%

Number of Hedge Fund Holders: 58

Etsy Inc. (NASDAQ:ETSY) operates two-sided online marketplaces that connect buyers and sellers worldwide. It operates through three segments: Etsy, Reverb, and Depop. It primarily operates the Etsy marketplace that connects artisans and entrepreneurs with various consumers. It also offers Reverb, which is a musical instrument marketplace, and Depop, which is a fashion resale marketplace.

The Etsy marketplace is central to the company’s growth, but it faced challenges in 2024, with GMS (Gross Merchandise Sales) declining by 8.6% year-over-year in Q4. For the full year, Etsy marketplace GMS was down 4% from 2023 and reached $12.6 billion for the consolidated entity. This underperformance is attributed partly to prioritizing longer-term customer experience improvements over near-term conversion-driving experiments.

Despite the GMS decline, the Etsy marketplace led a consolidated record revenue of $2.8 billion, which was up ~2% year-over-year. This was achieved through initiatives like Etsy Ads and consolidated payments. In Q4 alone, consolidated revenue increased by 1.2% year-over-year to a record $852 million. The company’s strategy for 2025 centers on focusing on Etsy Inc.’s (NASDAQ:ETSY) differentiation by emphasizing its unique selection of over 100 million creative goods.

Oakmark Global Fund stated the following regarding Etsy, Inc. (NASDAQ:ETSY) in its Q2 2024 investor letter:

“Etsy, Inc. (NASDAQ:ETSY) is a global marketplace for unique and creative goods that connects millions of buyers and sellers across the world. We first became interested in Etsy in 2017 when Josh Silverman took over as CEO and began transforming the company from a borderline nonprofit into a higher margin, faster-growing enterprise. The Covid-19 pandemic accelerated the company’s already strong fundamental results as millions of new customers flocked to the platform, but like many other Covid-19 beneficiaries, Etsy has since fallen deeply out of favor. In our view, investors today are too focused on the timing of Etsy’s return to growth and are ignoring the company’s positive long-term outlook. We believe the macro environment for Etsy’s product categories will eventually improve and Etsy is poised to benefit. At the same time, we believe Etsy’s continued push into international markets can provide a solid source of revenue growth for the long-term. After the recent sell-off, we were able to purchase shares at a discount to our estimate of intrinsic value.”

3. Cytokinetics Inc. (NASDAQ:CYTK)

Short % of Float As of April 16: 18.43%

Number of Hedge Fund Holders: 66

Cytokinetics Inc. (NASDAQ:CYTK) is a late-stage biopharmaceutical company that discovers, develops, and commercializes muscle activators and inhibitors as potential treatments for debilitating diseases. It develops small-molecule drug candidates that are primarily engineered to impact muscle function and contractility.

The company’s main focus for near-term growth is aficamten, which is a cardiac myosin inhibitor. In anticipation of potential approval, Cytokinetics is focused on commercial readiness activities in the US, while also laying the groundwork for its go-to-market strategy in Europe. It’s actively responding to FDA questions, preparing for clinical site inspections, and has recently submitted its 120-day safety update.  Cytokinetics plans to commercialize aficamten itself in the US and Western Europe.

In Q4 2024, Sanofi acquired the rights to develop and commercialize aficamten in China, with Cytokinetics eligible to receive up to $150 million in development and commercial milestone payments and royalties in the low to high teens on sales. In November 2024, a collaboration with Bayer granted Cytokinetics Inc. (NASDAQ:CYTK) a license agreement for aficamten in Japan, which included a EUR50 million upfront payment.

2. Charter Communications Inc. (NASDAQ:CHTR)

Short % of Float As of April 16: 15.92%

Number of Hedge Fund Holders: 71

Charter Communications Inc. (NASDAQ:CHTR) is a broadband connectivity and cable operator company that serves residential and commercial customers in the US. It offers subscription-based internet, video, and mobile & voice services. It also offers a suite of broadband connectivity services, Spectrum internet products, in-home & out-of-home WiFi, and Spectrum WiFi services.

The company is focused on using its converged connectivity capabilities, with Spectrum Mobile as a central pillar. The Spectrum Mobile business added over 2 million Spectrum Mobile lines in 2024, establishing its position as the fastest-growing mobile provider in the US. While Spectrum Mobile’s penetration stands at ~8% of Charter’s 57 million residential and SMB passings, its substantial subscriber additions were a key factor in the company’s overall 1% revenue growth for the full year.

The company’s strategy, reinforced by the Life Unlimited brand refresh, emphasizes bundled services such as mobile at competitive prices. Charter Communications Inc. (NASDAQ:CHTR) believes that the ability to integrate its wireline and wireless services offers a unique value proposition.

Conventum – Alluvium Global Fund increased its position in the company and stated the following regarding Charter Communications, Inc. (NASDAQ:CHTR) in its Q4 2024 investor letter:

“We discussed in our last report that Liberty Broadband’s 40.7% return in the September quarter reflected an impending deal (explained here) with its main investment, Charter Communications, Inc. (NASDAQ:CHTR). In early November Charter released its third quarter update, which the market (and us) viewed favourably, and Liberty’s share price rose 11.7% on the day. As a result, the Fund’s position in Liberty reached 8.4%. Cognisant of the 5/10/40 UCITS restrictions (yet wanting to maintain our position in the underlying assets) we sold a fair chunk of Liberty (to get it under 5%) and bought a little Charter. A short time later the companies reached agreement on the consolidation deal. The market’s reaction (Liberty’s share price fell 4.7% on the day, whereas Charter’s rose 3.6%) suggests this was less favourable to Liberty than anticipated (we suspect due to the long timeframe). And as Liberty fell 3.2% and Charter rose 5.8% over the quarter, the discount that Liberty trades (to the implied Charter price) has only widened. This is unwarranted in our view, particularly as one of Liberty’s businesses, GCI, is not part of the deal. Our focus is on having access to these assets at the best possible price. We are not perturbed by the deal, whether or not it consummates, nor its timeline. And, there are no additional costs to holding Liberty rather than Charter (nor any foregone dividends). On our analysis, these US broadband assets (via the Charter corporate structure) are providing a circa 9.0% earnings yield and 6.5% free cash flow yield, which we are confident will continue to grow. We are comfortable with the Fund’s 5.6% investment, as represented by its positions of 1.5% in Charter and 4.1% in Liberty.”

1. Caesars Entertainment Inc. (NASDAQ:CZR)

Short % of Float As of April 16: 11.59%

Number of Hedge Fund Holders: 79

Caesars Entertainment Inc. (NASDAQ:CZR) is a gaming and hospitality company. It owns, leases, brands, or manages domestic properties in 18 states with items like slot machines, video lottery terminals, e-tables, and hotel rooms. It also operates and conducts retail and online sports wagering across 32 jurisdictions in North America, and iGaming in five jurisdictions in North America.

In 2024, Caesars Digital achieved records with $1.2 billion in net revenue, which was a year-over-year improvement of 20%. In Q4 alone, Caesars Digital generated $303 million in net revenue. The company noted that unfavorable sports betting outcomes in October and December impacted these figures. Excluding these low hold results, the digital segment’s revenue would have been ~$370 million.

A lot of this growth came from the iGaming sector, which showed a 65% net revenue growth during Q4. This was fueled by product offerings within the Caesars Palace Online app and the rollout of the new Horseshoe app. In January, Caesars Entertainment Inc. (NASDAQ:CZR) launched its first branded online Caesars Casino Live dealer studio in Pennsylvania, with plans to introduce similar branded studios in New Jersey and Michigan in H1 of the year.

Buckley Capital stated the following regarding Caesars Entertainment, Inc. (NASDAQ:CZR) in its Q3 2024 investor letter:

“We recently added Caesars Entertainment, Inc. (NASDAQ:CZR) to our portfolio at an average price of ~$37 per share. We believe that in owning CZR, we are getting world-class assets in both its owned casino real estate and digital businesses – which will comprise almost 70% of 2025 EBITDA – while paying a rock-bottom price. With three important catalysts about to materialize in the next 12 months – significant deleveraging, the digital business inflecting to substantial profitability, and massive FCF generation – we believe investor enthusiasm will turn more positive and the shares will re-rate higher. Caesars currently has an $8.6 billion market cap. We believe it could trade 50% to 100% higher within the next 12-24 months.

CZR as it exists today was formed in July 2020 by the merger of legacy Caesars Entertainment and Eldorado Resorts. Eldorado’s management, led by CEO Tom Reeg, who has an outstanding track record of increasing shareholder value, took over CZR’s operations. Reeg’s focus on maximizing long-term FCF and deleveraging the business aligns with shareholders’ interests. He holds 700,000 shares when fully vested (worth $25 million)…” (Click here to read the full text)

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.