In this article, we will discuss the 10 Worst Aggressive Growth Stocks to Buy According to Short Sellers
According to Morningstar, stocks have experienced a healthy recovery over the past few months. However, the momentum was insufficient to propel the market to a new high for the year. All eyes are on the outcome of trade talks, with stocks settling into a holding pattern.
What’s Next for US Equities?
The analysts opine that the outlook for the broader equity market over the upcoming months appears to be relatively balanced, as bullish signals such as healthy earnings, a strong economy, and moderation on tariff policy offset the more bearish signals, including elevated valuations and deficit risk, says Morningstar. The market strategists believe that 2025 forecasts focus on returns of mid-single digits, reflecting a slowdown from the double-digit gains of the previous 2 years, added Morningstar.
Furthermore, the firm believes that despite worries related to sticky inflation and a potential labor market slowdown, the US economy appears to be resilient. Amidst Trump’s reversal on tariffs, forecasters have reduced the odds of recession. Also, the consumers continue to spend amidst gloomy measures of sentiment, added Morningstar.
Amidst such trends, we will look at the 10 Worst Aggressive Growth Stocks to Buy According to Short Sellers
Our Methodology
To list the 10 Worst Aggressive Growth Stocks to Buy According to Short Sellers, we chose stocks from the growth-oriented industries such as technology and biotechnology. After getting an extensive list of stocks, we narrowed it down to the ones having high short interest. Finally, the stocks are ranked in descending order of their short interest. We also mentioned the hedge fund sentiments around each stock, as of Q1 2025.
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 Worst Aggressive Growth Stocks to Buy According to Short Sellers
10. Ardelyx, Inc. (NASDAQ:ARDX)
Short % of Float (As of May 30): 13.76%
Number of Hedge Fund Holders: 28
Ardelyx, Inc. (NASDAQ:ARDX) is one of the 10 Worst Aggressive Growth Stocks to Buy According to Short Sellers. On June 18, H.C. Wainwright began coverage on the company’s stock with a “Buy” rating and a price objective of $10.00. The firm highlighted Ardelyx, Inc. (NASDAQ:ARDX)’s successful commercialization of bowel and kidney disease treatments.
The firm mentioned about Ardelyx, Inc. (NASDAQ:ARDX)’s demonstrated approval and commercial execution with IBSRELA for irritable bowel syndrome with constipation in adults and XPHOZAH for treating hyperphosphatemia in adults having chronic kidney disease on dialysis. Overall, the firm expects near-term commercial progress for Ardelyx, Inc. (NASDAQ:ARDX). The company delivered a strong Q1 2025, garnering $74 million in total revenue. As IBSRELA enters its 3rd full year on the market, it saw strong YoY growth of 57%.
The US net product sales revenue for IBSRELA during Q1 2025 came in at $44.4 million. This growth was supported by increases throughout key demand indicators, which include total writers and new and refill prescriptions. The US net product sales revenue for XPHOZAH during Q1 2025 came in at $23.4 million, thanks to the strong commercial momentum and execution.
Ardelyx, Inc. (NASDAQ:ARDX) is engaged in discovering, developing, and commercializing medicines to treat unmet medical needs.
9. nCino, Inc. (NASDAQ:NCNO)
Short % of Float (As of May 30): 13.13%
Number of Hedge Fund Holders: 31
nCino, Inc. (NASDAQ:NCNO) is one of the 10 Worst Aggressive Growth Stocks to Buy According to Short Sellers. On June 18, JPMorgan began coverage on nCino, Inc. (NASDAQ:NCNO)’s stock with a “Neutral” rating and a price objective of $30.00. The firm saw that banks have been prioritizing functionality over configurability in nCino, Inc. (NASDAQ:NCNO)’s offerings, mainly in down-market segments. Furthermore, the company has been working to shorten project timelines via more prescriptive products and AI tools in a bid to improve profitability.
JPMorgan believes that the digital banking space is an attractive investment arena. nCino, Inc. (NASDAQ:NCNO) is benefiting from industry experience across banking and technology, given that it was spun out as a separate company from a bank in late 2011. The firm also mentioned that nCino, Inc. (NASDAQ:NCNO) has been pivoting its focus from professional services revenue growth to improving professional services profit margins. In Q1 2026, the company’s total revenues came in at $144.1 million, reflecting a rise of 13% from $128.1 million in Q1 2025, with subscription revenues for Q1 2026 coming at $125.6 million, up from $110.4 million one year ago.
For Q2 2026, the company expects total revenues of between $142.0 million – $144.0 million, and subscription revenues in the range of $124.5 million – $126.5 million.
nCino, Inc. (NASDAQ:NCNO) offers software solutions to financial institutions. Conestoga Capital Advisors, an asset management company, released its Q4 2024 investor letter. Here is what the fund said:
“NCino, Inc. (NASDAQ:NCNO) provides cloud-based software solutions to financial institutions to facilitate lending, account opening, and onboarding. NCNO’s Bank Operating System has become the market leader in commercial lending divisions within banks. NCNO has broadened their platform to include mortgage origination, consumer lending, and small business lending. NCNO operates in a serviceable addressable market of nearly $40 billion. NCNO’s revenue is 86% recurring, grows in the mid-teens range organically, and is geographically diverse with 20% coming from international markets. NCNO targets being a “rule of 50” company and has expanded operating margins rapidly to 20%, with the goal of reaching >30%. NCNO is headquartered in Wilmington, NC.”
8. Sarepta Therapeutics, Inc. (NASDAQ:SRPT)
Short % of Float (As of May 30): 11.04%
Number of Hedge Fund Holders: 47
Sarepta Therapeutics, Inc. (NASDAQ:SRPT) is one of the 10 Worst Aggressive Growth Stocks to Buy According to Short Sellers. On June 18, TD Cowen downgraded Sarepta Therapeutics, Inc. (NASDAQ:SRPT)’s stock to “Hold” from “Buy,” reducing the price objective to $24 from the prior target of $62, as reported by The Fly. This downgrade reflects the increased probability of withdrawal of Elevidys’ FDA approval, for non-ambulatory and potentially ambulatory patients, as per the firm’s analysis, mainly if the company continues to lose support from the Duchenne muscular dystrophy community.
The safety worries seem to be central to this downgrade, with the firm highlighting that Elevidys shows a 30% liver function test elevation rate. This suggests that the treatment’s safety profile is being re-evaluated throughout all DMD patients. Overall, the new price objective for Sarepta Therapeutics, Inc. (NASDAQ:SRPT) is considering the firm’s DCF valuation of Elevidys, which is adjusted for the probability of market withdrawal. However, as part of a comprehensive review of safety data, Sarepta Therapeutics, Inc. (NASDAQ:SRPT) continues to take proactive steps to mitigate the risk of acute liver failure in non-ambulatory patients.
Overall, the company stated that the broader biotech market witnessed significant pressure in Q1 2025. Considering the company’s significant revenue and a deep pipeline, it is well-placed to navigate the challenging times.
Sarepta Therapeutics, Inc. (NASDAQ:SRPT) is a commercial-stage biopharmaceutical company focusing on the discovery and development of RNA-targeted therapeutics, gene therapies, and other genetic therapeutic modalities for treating rare diseases.
7. Adaptive Biotechnologies Corporation (NASDAQ:ADPT)
Short % of Float (As of May 30): 8.13%
Number of Hedge Fund Holders: 27
Adaptive Biotechnologies Corporation (NASDAQ:ADPT) is one of the 10 Worst Aggressive Growth Stocks to Buy According to Short Sellers. On June 18, Craig-Hallum began coverage of Adaptive Biotechnologies Corporation (NASDAQ:ADPT)’s stock with a “Buy” rating and a price objective of $15, as reported by The Fly.
The research firm believes that the company is an unequivocal leader in testing to measure minimal residual disease (MRD) in patients with hematologic malignancies. The firm opines that Adaptive Biotechnologies Corporation (NASDAQ:ADPT) is essentially the only player in the $1.8 billion heme MRD market, which has potential for sustainable 20%+ growth, and several near-term growth drivers. It also has the potential to turn EBITDA break-even in core business, a track record of exceeding the estimates, and an expectation for robust margin expansion.
The firm highlighted that clonoSEQ test is capable of detecting very small quantities of cancer cells, which may remain during or after treatment. As per the research note, the ability of the test to monitor MRD status supports physicians in determining treatment efficacy and making therapy adjustments as required. The firm also highlighted that MRD testing can identify cancer recurrence earlier than alternative diagnostic methods, offering an advantage for patient care.
Craig-Hallum mentioned certain near-term catalysts for Adaptive Biotechnologies Corporation (NASDAQ:ADPT), such as increased coverage and payor reimbursement rates, EMR integrations, adoption of MRD in clinical trials, and a strategic partnership with NeoGenomics (NEO). Furthermore, a transition to a new test platform is expected to fuel gross margins.
Adaptive Biotechnologies Corporation (NASDAQ:ADPT) is a commercial-stage biotechnology company that is focused on harnessing the inherent biology of the adaptive immune system to transform the diagnosis and treatment of disease.
6. Alkami Technology, Inc. (NASDAQ:ALKT)
Short % of Float (As of May 30): 6.80%
Number of Hedge Fund Holders: 29
Alkami Technology, Inc. (NASDAQ:ALKT) is one of the 10 Worst Aggressive Growth Stocks to Buy According to Short Sellers. On June 18, JPMorgan analyst Ella Smith began coverage of the company’s stock with an “Overweight” rating and a price objective of $40, reducing it from $45. The firm highlighted the company’s gross margin expansion, which was achieved via improvements in hosting costs, platform investments, as well as operating leverage throughout post-sales operations.
JPMorgan believes that client renewals happen to be an important lever for fueling long-term gross margin targets. Also, upselling products into Alkami Technology, Inc. (NASDAQ:ALKT)’s existing customer base involves less implementation work, leading to elevated gross margins and underscoring the importance of Alkami Technology, Inc. (NASDAQ:ALKT)’s cross-sell go-to-market strategy, added the firm. Overall, JPMorgan believes that the digital banking space remains an attractive investment arena.
Alkami Technology, Inc. (NASDAQ:ALKT) exited Q1 2025 with 20.5 million users on the Alkami platform, an increase of 2.3 million as compared to the year-ago quarter. The company closed its acquisition of MANTL, and anticipates it to be accretive to Alkami Technology, Inc. (NASDAQ:ALKT)’s overall revenue growth and gross margin expansion. Furthermore, the company believes that the impact of the acquisition will be accretive to adjusted EBITDA in 2026, enabling Alkami Technology, Inc. (NASDAQ:ALKT) to meet or surpass long-term financial targets.
Alkami Technology, Inc. (NASDAQ:ALKT) provides cloud-based digital banking solutions.
5. Microchip Technology Incorporated (NASDAQ:MCHP)
Short % of Float (As of May 30): 6.57%
Number of Hedge Fund Holders: 56
Microchip Technology Incorporated (NASDAQ:MCHP) is one of the 10 Worst Aggressive Growth Stocks to Buy According to Short Sellers. On June 18, Cantor Fitzgerald analyst Matthew Prisco began coverage of Microchip Technology Incorporated (NASDAQ:MCHP)’s stock with a “Neutral” rating and a price objective of $70. The firm highlighted the positive developments in the company’s efforts to improve business operations, mentioning that gross margin expansion over the upcoming quarters can offer a meaningful upside for Microchip Technology Incorporated (NASDAQ:MCHP).
The firm cited Microchip Technology Incorporated (NASDAQ:MCHP)’s preferential exposure to the industrial sector as a positive factor. This measure keeps the risk biased to the upside, suggesting that the firm will take a long position in the near term, despite a neutral rating. For Q1 2026, Microchip Technology Incorporated (NASDAQ:MCHP) expects consolidated net sales of between $1.045 billion and $1.070 billion. Earlier, it provided guidance of consolidated net sales of between $1.025 billion and $1.070 billion.
Microchip Technology Incorporated (NASDAQ:MCHP)’s bookings activity for May continues to track higher than any month over the last two years. The company is confident in the recovery of its business as it executes on its strategic initiatives, reduces inventory levels, and makes progress towards its long-term business model. ClearBridge Investments, an investment management company, released its Q1 2025 investor letter. Here is what the fund said:
“Also within the IT sector, we added Microchip Technology Incorporated (NASDAQ:MCHP), which supplies analog and mixed-signal microprocessors for use in the automotive, industrial, computing and other industries. We took advantage of recent weakness in the stock to add to the position. We believe that the return of the company’s prior CEO and efforts to rebuild relationships with customers has resulted in Microchip recovering market share to prior levels, and that it represents an attractive cyclical improvement story with asset optimization improvements and good business visibility.”
4. Credo Technology Group Holding Ltd (NASDAQ:CRDO)
Short % of Float (As of May 30): 5.93%
Number of Hedge Fund Holders: 41
Credo Technology Group Holding Ltd (NASDAQ:CRDO) is one of the 10 Worst Aggressive Growth Stocks to Buy According to Short Sellers. On June 18, TD Cowen upped the company’s price objective to $95.00 from $85.00, while maintaining a “Buy” rating, as reported by The Fly. The firm believes that despite its strong progress to date, there is significant runway to its story, which is yet to be seen. This is tied to high-speed connectivity for datacenter artificial intelligence, added the analyst.
The firm sees Credo Technology Group Holding Ltd (NASDAQ:CRDO)’s growth story as early, open-ended, and diversifying. The company’s proprietary technology emphasises low-power, high-speed connectivity solutions, which cater to expanding market opportunities fueled by AI proliferation and faster line-rate speeds in back-end and front-end networks. The firm has tagged datacenter as the most attractive semiconductor end market, and expects that networking infrastructure and connectivity will be the fastest-growing sub-segment in that space.
Credo Technology Group Holding Ltd (NASDAQ:CRDO)’s product portfolio consists of Active Electric Cables, optical Digital Signal Processors, and other connectivity-related chipsets. Such products place the company squarely at the intersection of the growing industry verticals, added the firm. For Q1 2026, Credo Technology Group Holding Ltd (NASDAQ:CRDO) expects its revenue to be in the range of $185.0 million – $195.0 million, with GAAP gross margin to be between 63.4% – 65.4%.
Renaissance Investment Management, an investment management company, released its Q4 2024 investor letter. Here is what the fund said:
“Credo Technology Group Holding Ltd (NASDAQ:CRDO), a provider of connectivity solutions for data centers, was our best performing stock in the fourth quarter. The company’s products target the AI-server market with very high bandwidth connectivity rates and low-power solutions. In the most recently reported quarter, the company saw increased demand from current customers along with the ramping of a new customer that drove revenue guidance significantly above expectations. Moreover, the company expects revenues for the next fiscal year to grow by at least 50%. We believe the market share opportunities for Credo are still in the early stages, as the company continues to engage with large hyperscalers and the demand for AI servers and infrastructure remains robust.”
3. Q2 Holdings, Inc. (NYSE:QTWO)
Short % of Float (As of May 30): 5.70%
Number of Hedge Fund Holders: 31
Q2 Holdings, Inc. (NYSE:QTWO) is one of the 10 Worst Aggressive Growth Stocks to Buy According to Short Sellers. On June 18, JPMorgan initiated coverage of Q2 Holdings, Inc. (NYSE:QTWO)’s stock with an “Overweight” rating and a price objective of $115. The firm believes that the company continues to modernize customer-facing software for credit unions and regional banks. Furthermore, it believes that Q2 Holdings, Inc. (NYSE:QTWO) possesses elevated levels of customer retention and 5–7 year contract lengths, which aid in revenue visibility.
Also, the firm sees the monetization model as defensive, which is based on the number of bank accounts on the respective platform and the number of products a bank subscribes. Q2 Holdings, Inc. (NYSE:QTWO)’s Q1 2025 bookings performance was characterized by significant renewals and expansion activity. The company opines that the breadth of its customer base and resilient business model, together with a strong pipeline and healthy renewal opportunity ahead, place it well. Q2 Holdings, Inc. (NYSE:QTWO)’s Remaining Performance Obligations total, or Backlog, rose $74 million sequentially and $379 million YoY. This resulted in a total committed Backlog of approximately $2.3 billion at quarter-end.
For Q2 2025, the company expects total revenue of $191.0 million – $195.0 million, reflecting YoY growth of 10% – 13%, while adjusted EBITDA is expected to be between $41.0 million – $44.0 million.
Q2 Holdings, Inc. (NYSE:QTWO) offers digital solutions to financial institutions, financial technology companies, FinTechs, and alternative finance companies (Alt-FIs).
2. Jabil Inc. (NYSE:JBL)
Short % of Float (As of May 30): 4.28%
Number of Hedge Fund Holders: 55
Jabil Inc. (NYSE:JBL) is one of the 10 Worst Aggressive Growth Stocks to Buy According to Short Sellers. On June 18, Argus Research upped its intermediate-term rating on Jabil Inc. (NYSE:JBL)’s stock to “Buy” from “Hold” with a price objective of $230. The firm’s long-term rating on the company’s stock remains “Buy.” Analysts led by Jim Kelleher highlighted that the company’s revenue and non-GAAP EPS in Q3 2025 sharply exceeded the Wall Street expectations and the guidance. Furthermore, the company returned to positive annual topline growth for the first time since Q3 2023.
In Q3 2025, Jabil Inc. (NYSE:JBL) saw net revenue of $7.8 billion and core diluted EPS (Non-GAAP) of $2.55. The company’s Intelligent Infrastructure segment remains a critical growth engine, supported by accelerating AI-driven demand. For FY 2025, it expects net revenue of $29 billion and core diluted earnings per share (Non-GAAP) of $9.33. Kelleher and his team believe that Jabil Inc. (NYSE:JBL) seems to be well-placed beyond FY 2025 as a result of fast-growing opportunities available in AI data center infrastructure, connected healthcare, semiconductor capital equipment, and other core businesses.
As per Kelleher’s team, the revenue headwinds in end-markets, in technology and non-technology areas, continue to give way to increased demand, mainly in the AI and cloud space. As per the analysts, Jabil Inc. (NYSE:JBL) expects a $8.5 billion annual AI revenue opportunity, and it plans to invest $500 million in new US facilities.
Jabil Inc. (NYSE:JBL) provides electronics design, production, and product management services, electronic circuit design services, including application-specific integrated circuit design, firmware development, and rapid prototyping services, among others.
1. Zoetis Inc. (NYSE:ZTS)
Short % of Float (As of May 30): 2.37%
Number of Hedge Fund Holders: 74
Zoetis Inc. (NYSE:ZTS) is one of the 10 Worst Aggressive Growth Stocks to Buy According to Short Sellers. On June 18, Stifel analyst Jonathan Block downgraded Zoetis Inc. (NYSE:ZTS)’s stock to “Hold” from “Buy,” reducing the price objective to $160 from $165. The firm warned that revenue growth might fall short of Wall Street expectations over the upcoming 2 years as competition intensifies throughout key product categories. While there are longer-term opportunities in oncology and kidney disease, the firm believes that these markets will develop more slowly.
As per the firm, while Zoetis Inc. (NYSE:ZTS) dealt effectively with competition in the past, this time the competition might prove to be more successful. Stifel’s survey identified that there is robust veterinarian interest in Merck’s pending Atopic Dermatitis JAK inhibitor and Elanco’s CQ – chloroquine. However, Zoetis Inc. (NYSE:ZTS) continues to advance innovation and care for animals throughout the globe.
Simparica Trio gained a new label indication in the US to prevent Dipylidium caninum (flea tapeworm) infections by killing Ctenocephalides felis vector fleas in treated dogs. Now, Simparica Trio happens to be the only canine combination parasiticide indicated to prevent flea tapeworm infections, at the source, by killing vector fleas before the transmission.
Polen Capital, an investment management company, released its Q4 2024 investor letter. Here is what the fund said:
“Zoetis Inc. (NYSE:ZTS) and Adobe were also notable absolute detractors. Zoetis has been posting excellent growth on the back of its pain and dermatology franchises for quite some time, and its core companion animal business has been firing on all cylinders. Despite this, the stock has come under pressure due to concerns about the growth prospects of Librela, its biologic drug for pain in dogs (as well as Solensia, the sister drug for cats). There has been some concern about the side effects of these drugs, but the data disclosed thus far shows a very low level of adverse events, with drugs that prove highly effective in treating pain. We expect strong growth from these and other drugs currently marketed by Zoetis, with more to come from its prolific pipeline. We used the recent weakness to add to our position.”
While we acknowledge the potential of ZTS to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than ZTS and that has 100x upside potential, check out our report about this cheapest AI stock.
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Disclosure: None.
