In this article, we will be looking at the 11 best short squeeze stocks to buy now.
The latest U.S. tariff wave has created a suitable environment where short squeeze investments will thrive. On August 7, 2025, President Donald Trump’s reciprocal duties came into effect, slapping steep rates on dozens of trading partners. According to CNBC, Syria faces a 41% tariff, Laos and Myanmar at 40%, and Switzerland at 39% after a failed last-minute deal. Brazil and India feel the tightest squeeze as they face 50% duties, effective by the end of this month. Even the U.S. allies were not spared, as 15% tariffs were imposed on the EU, Japan, and South Korea
In addition to disrupting the supply chains, the ripples from these trade shocks could potentially impact the investors’ decisions. Stocks under the industries heavily exposed to tariffs often attract significant short interest since traders bet on earnings pressure and valuation declines. However, in a highly volatile climate, all that’s needed are a surprise earnings beat, policy reversal, or strategic deal to turn those bearish wagers upside-down.
As of now, these contributors are widely scattered without favoring any single sector in the economy. We have come up with a list of 11 best short squeezes that could be potentially rewarding to investors in this highly volatile and tense market.
Image by Nattanan Kanchanaprat from Pixabay
Our Methodology
When putting together our list of 11 best short squeeze stocks to buy now, we followed a few criteria. Primarily, we included stocks with a short float of 20% or above. With respect to catalysts potentially impacting the stock price, we looked up the company’s press releases and the analyst reports from credible websites such as CNN. For ranking the stocks, we have used the short float %. All the data used in the article was taken from financial databases and analyst reports, with all information updated as of August 12, 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).
11. Pagaya Technologies Ltd. (NASDAQ:PGY)
Short Float: 23.82%
Pagaya Technologies Ltd. (NASDAQ:PGY) is among our list of 11 best short squeeze stocks to buy now. The company’s Q2 results have exceeded expectations, and its strategic moves are gaining a positive outlook among investors.
The Israel-based company listed on NASDAQ, Pagaya Technologies Ltd. (NASDAQ:PGY), deploys proprietary AI and machine learning platforms for optimizing B2B lending. It partners with financial institutions and fintech, underwriting loans, including second-look consumer credit for underserved segments. Recently, the company partnered with Klarna and issued its first $300 million bond backed by BNPL loans.
In its Q2 2025 earnings results, Pagaya Technologies Ltd. (NASDAQ:PGY) announced an EPS of $0.64, surpassing the forecasted $0.13, representing a surprise of 392.31%. Revenue also exceeded projections, reaching $326 million against an anticipated $311.96 million.
During the quarter, Pagaya Technologies Ltd. (NASDAQ:PGY) successfully recorded $2.3 billion across six ABS transactions and expanded its funding network by 10 new investors. The total funding partners currently stands at 145. Additionally, on July 14, 2025, the company entered a new forward flow agreement with Castlelake. The agreement sets a purchase of up to $2.5 billion in Personal Loans over 16 months, increasing capacity to approximately $5 billion since the end of 2024.
With a significant short float of 23.82% signaling elevated bearish bets, Pagaya Technologies Ltd. (NASDAQ:PGY) exudes a strong potential for a short squeeze if bullish momentum gains traction.
10. CompoSecure, Inc. (NASDAQ:CMPO)
Short Float: 24.63%
CompoSecure, Inc. (NASDAQ:CMPO) secures a position on our list of 11 best short squeeze stocks to buy now. Operating results in the second quarter exceeded expectations amid new launches from the company.
Based in New Jersey, CompoSecure, Inc. (NASDAQ:CMPO) designs and manufactures premium metal, composite, and secure authentication payment cards for banks, fintech, and global issuers. The company has shipped more than 30 million cards since 2010. Instead of focusing on security alone, the company incorporates aesthetics to ensure trusted transactions across physical and digital ecosystems.
CompoSecure, Inc. (NASDAQ:CMPO) announced strong top-line growth in Q2 2025, achieving record profitability, owing to domestic programs from traditional banks and fintech. Non-GAAP Net Sales increased by 10% reaching $119.6 million compared to Q2 2024. The company’s financial stability also benefits from improved manufacturing efficiencies from the CompoSecure Operating System (COS) and a favourable product mix.
During the quarter, the company has launched several customer-attractive programs, including those with Chase Sapphire Reserve, XP Legacy, Crypto.com, MGM Rewards, and Gemini. Furthermore, the Arculus team announced the new Coinbase One Card – the first crypto card on the American Express network. CompoSecure, Inc. (NASDAQ:CMPO) further raised its full-year 2025 guidance, targeting a total Non-GAAP Net Sales of approximately $455 million and Pro Forma Adjusted EBITDA of about $158 million.
The company’s 24.63% short float suggests significant bearish positioning. With currently emerging positive catalysts, the company stands to become a potential short squeeze opportunity.
