In this article, we will take a look at the 13 Best Short Squeeze Stocks to Invest In.
US markets climbed to record highs, wrapping up a solid month, as President Trump announced he will soon make a decision on the Iran deal. The S&P 500 posted its ninth consecutive weekly gain in the final week of May, the longest streak of wins since 2023. Markets are hungry for relief on the US-Iran war stage, as the blockage of the Strait of Hormuz adds to soaring prices and raises worries regarding the Federal Reserve’s future moves around interest rates.
On May 28, Fundstrat’s Tom Lee and Brian Belski, founder and CEO of Humilis, appeared on CNBC’s Closing Bell to analyze the market’s recent performance. Lee stated that earnings had greatly outperformed forecasts, accounting for most of the market’s recent rise. Investors predicted S&P 500 earnings of around $70 per share in Q1, but outcomes seem closer to $80 per share. According to Lee, the $10-per-share beat, when annualized, equates to significant upside for the index and helps justify much of the run since April.
That said, Belski pointed out that investors should be concerned if earnings growth among large-cap companies stagnates, even if growth remains healthy by historical standards.
Our Methodology
To compile our list of the best short squeeze stocks, we made use of stock screeners to identify stocks with significant short interest. From that list, we chose stocks with a short float of 20% or above. These stocks are also popular among analysts and elite hedge funds.
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).
13. Tempus AI, Inc. (NASDAQ:TEM)
Tempus AI, Inc. (NASDAQ:TEM) ranks among the best short squeeze stocks to invest in. Following the company’s first-quarter results, H.C. Wainwright reduced its price target for Tempus AI, Inc. (NASDAQ:TEM) to $64 from $95 while retaining a Buy rating on the company’s shares. Tempus AI, Inc. (NASDAQ:TEM) posted total revenue of $348.1 million in Q1, up 36.1% year-over-year and above H.C. Wainwright’s expectation of $345.3 million.
On the other hand, the company reported a net loss of $125.9 million, or $0.71 per diluted share, which was greater than H.C. Wainwright’s expected loss of $84.7 million. The firm stated that the operating loss has increased in comparison to previous quarters.
Tempus AI, Inc. (NASDAQ:TEM) expanded a number of partnerships during the quarter, including its collaboration with Gilead to offer enterprise-wide accessibility to its AI-driven Lens platform and a multi-year strategic partnership with Merck to expedite biomarker discovery and development. In addition, the company revealed results from the ALERT trial with Medtronic, which showed that its AI-driven EHR alerts improved life-saving heart valve operations by 40%.
Tempus AI, Inc. (NASDAQ:TEM) is a healthcare technology company that uses artificial intelligence to advance precision medicine.
12. Lyft Inc. (NASDAQ:LYFT)
Lyft Inc. (NASDAQ:LYFT) ranks among the best short squeeze stocks to invest in. On May 15, DA Davidson reduced its price target for Lyft Inc. (NASDAQ:LYFT) to $14.50 from $19, retaining a Neutral rating on the company. The firm revised its financial model for the company following first-quarter fiscal 2026 earnings, which were released on May 7.
DA Davidson’s Lyft Inc. (NASDAQ:LYFT) revenue forecast for 2026 stayed mostly unchanged. That said, the firm reduced its 2026 adjusted EBITDA expectation to $694.3 million from $714.9 million due to revisions to operating expense modeling for the latter half of the year.
Meanwhile, on May 14, Bernstein SocGen Group maintained its Market Perform rating and $16 price target for Lyft Inc. (NASDAQ:LYFT) following talks with the company’s executives. The talks focused on autonomous vehicles and Lyft’s position and pricing power as the technology spreads among consumers.
The company’s management highlighted the advantages of a hybrid network and stated that its approach centers on developing closer ties with a smaller group of partners.
Lyft Inc. (NASDAQ:LYFT) operates a peer-to-peer ridesharing marketplace in the U.S. and Canada. Its platform provides a ridesharing marketplace that connects drivers with riders, a car rental program for drivers, and a network of shared bikes and scooters in various cities to meet riders’ needs for short trips.
