In this article, we will discuss the 12 Best High Short Interest Stocks With Highest Upside Potential.

On May 29, Melissa Brown, Managing Director of Investment Decision Research, joined BNN Bloomberg to assess the health of the US economy. Brown stated that her primary concern is not high valuations or concentrated earnings growth, but rather the inflation pressures that are driving up bond yields. She explained that while moderate inflation can signify economic growth, it reaches a tipping point where it negatively impacts stocks and bonds. She noted that while stock investors appear unconcerned (perhaps viewing the current environment as transitory), bond investors are showing clear concern by pushing longer-term yields upward. Although yields might be flattening slightly, they remain significantly higher than they were a month ago.

According to Brown, inflation exceeding the Fed’s 2 percent target is concerning because it shifts the economic balance, potentially preventing companies from raising prices while wages rise or causing consumers to face costs they cannot sustain. She observed that consumers are currently forced to spend on necessities like food and gasoline, which compels them to cut back on other areas of spending. Brown suggested that earnings have remained strong for the first quarter due to a “stock market wealth effect,” where those invested in the market are experiencing significant gains and spending freely, essentially compensating for the lack of spending from those focused only on necessities. She characterized this as a precarious way to generate earnings and noted that this disconnect explains the record low consumer sentiment index of 44.8, as consumers express pessimism in surveys while continuing to spend in specific parts of the economy.

Regarding investment opportunities, Brown expressed a preference for markets outside the US. She noted that while the US market has been strong, many non-US markets have outperformed it, and these other markets may have more room to grow since they led for many years before the current year. She stated that, in the absence of a global recession, there are likely more opportunities outside the US than within it.

Our Methodology

We sifted through the Finviz stock screener to compile a list of stocks with a short percentage of float between 15% and 25%. We then selected 12 stocks that had an upside potential of over 25%, and limited our final selection to companies that have recently reported noteworthy developments likely to impact investor sentiment. These stocks are also popular among elite hedge funds and are ranked in ascending order of their upside potential.

Note: All data was sourced on June 1. 

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 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).

12 Best High Short Interest Stocks With Highest Upside Potential

12. Bentley Systems Inc. (NASDAQ:BSY)

Average Upside Potential: 27.88%

Bentley Systems Inc. (NASDAQ:BSY) is one of the best high short interest stocks with highest upside potential. On May 7, Bentley Systems announced its financial results for Q1 2026. The company reported total revenues of $424.2 million, marking a 14.5% year-over-year increase, while subscription revenues reached $392.5 million. ARR grew to $1,494.5 million, reflecting a constant currency growth rate of 11.5%, with a net income per diluted share of $0.30.

Leadership highlighted a strong start to the year, driven by solid market fundamentals and consistent execution, particularly within the Resources and Public Works/Utilities sectors. Management emphasized the company’s commitment to advancing AI initiatives across its portfolio, aiming to integrate AI-driven workflows that enable engineering firms to leverage their proprietary knowledge more effectively at a machine scale.

On the financial operations front, the company maintained robust profitability and cash flow, reporting $187.9 million in free cash flow. Bentley Systems Inc. (NASDAQ:BSY) also optimized its capital structure by repaying 2026 convertible notes and securing a new $550 million term loan, which increased total borrowing capacity to $1.85 billion. This move aims to enhance financial flexibility for strategic priorities, including potential acquisitions and shareholder returns.

Bentley Systems Inc. (NASDAQ:BSY) develops infrastructure engineering software. The company provides integrated software solutions used across professional disciplines, infrastructure sectors, geographies, and different stages of the infrastructure lifecycle.

11. Spyre Therapeutics Inc. (NASDAQ:SYRE)

Average Upside Potential: 32.09%

Spyre Therapeutics Inc. (NASDAQ:SYRE) is one of the best high short interest stocks with highest upside potential. On May 5, Spyre Therapeutics reported a strong Q1 2026, supported by a public offering that resulted in $1.2 billion in pro forma cash, providing a financial runway into late 2029. While R&D expenses rose to $60.4 million due to clinical trial advancements, the company maintained its strategic focus on developing long-acting antibodies for inflammatory bowel and rheumatic diseases.

The company achieved significant clinical progress, notably reporting positive Phase 2 induction data for SPY001 in ulcerative colitis. With the SKYWAY rheumatoid arthritis sub-study now over-enrolled and timelines accelerated, Spyre remains on track to deliver six proof-of-concept readouts across its primary clinical trials throughout 2026.

Looking ahead, management is prioritizing the ongoing enrollment of its IBD combination therapies in the SKYLINE trial. By focusing on these differentiated pipeline assets, Spyre Therapeutics Inc. (NASDAQ:SYRE) aims to redefine current standards of care while executing a disciplined capital strategy to support long-term growth.

Spyre Therapeutics Inc. (NASDAQ:SYRE) is a US biotechnology company focused on developing medicines for people living with inflammatory bowel disease and rheumatic diseases. It develops advanced antibodies engineered for prolonged activity and formulated for delivery as monotherapies.