10 Tech and Communication Stocks With High Short Interest That Are On Retail's Radar
By Stocktwits Inc | First Published Nov 29, 2024, 3:14 PM ISTThe S&P 500 Index, a measure of broader market performance, is up over 25% so far this year.
The stock market has been on a tear for a second year in running, with the S&P 500 Index, a measure of broader market performance, up over 25% so far this year. More upside is likely as the market enters into the seasonally strong month of December.
As valuations look stretched, a judicious bet on some heavily-shorted stocks may pay off, given the potential for a short-squeeze.
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Short interest is the number of shares that have been sold short, either as a percentage of float or the outstanding shares. Shorting is a trading strategy in which a trader borrows a security in hopes that its price would fall, and then buy it back at a lower price to return it to the lender.
A short-squeeze occurs when the shorted stock rises, forcing short sellers to buy it to minimize their losses.
Here’s a compilation of some widely-followed stocks from the technology and communication services sectors that have high short interests (more than 10%):
Mara Holdings, Inc. ($MARA)
Bitcoin ($BTC.X) miner MARA’s fortunes are tied to the apex crypto, which has been a tear ever since Republican candidate Donald Trump won the presidential election. The sharp spike has pushed the crypto tantalizingly close to the psychological barrier of $100,000.
Notwithstanding the mid-November dip seen in MARA stock following the earnings and a $1 billion convertible note offering, the stock has rallied more than 65% since the Nov. 5 election. For the year-to-date, Mara is up nearly 15%.
Given MARA’s swelling Bitcoin holding (26,747 at end-Q3), retail sees it as a “baby” MicroStrategy, Inc. ($MSTR).
CleanSpark, Inc. ($CLSK)
Henderson, Nevada-based CleanSpark is also a Bitcoin miner, and it owns and operates data centers that primarily run on low-carbon power. Its stock has advanced in line with the broader market this year.
Retail’s bullishness on the stock is premised on their optimism concerning Bitcoin’s trajectory.
SoundHound AI, Inc. ($SOUN)
SoundHound AI is a Santa Clara, California-based provider of voice and conversational artificial intelligence (AI) solutions. Its shares are up a whopping 270% this year.
In mid-November, the company reported 89% year-over-year (YoY) revenue growth for the third quarter and raised its full-year revenue guidance.
Some Stocktwits users have pinned their hopes on short-squeeze pushing the stock toward the $20 level.
AST SpaceMobile, Inc. ($ASTS)
AST SpaceMobile, which provides cellular broadband services to end users who are out of terrestrial cellular coverage, is also a heavily shorted stock. The Midland, Texas-based company’s shares have jumped nearly 200% this year.
Retail is hopeful of space technology companies kicking into top gear as fund managers recommend the industry as a “high growth” opportunity.
c3.ai, Inc. ($AI)
c3.ai is an enterprise AI software company based out of Redwood City, California, and its shares have capitalized on the increasing popularity of the technology. c3.ai shares have jumped about 27% for the year-to-date period.
The company is all set to report its fiscal year 2025, second-quarter results on Dec. 8, with analysts, on average, estimating a non-GAAP loss of $0.16, wider than the year-ago loss of $0.13. Revenue, however, is expected to climb YoY from $73.23 million to $91.02 million.
Retail harbors a mixed view concerning the upcoming earnings report.
Super Micro Computer, Inc. ($SMCI)
AI server maker Super Micro has had a mixed year as optimism over its market opportunities are offset by accounting headwinds. A little over 16% of the company’s shares are currently shorted.
The Nasdaq is set to respond to the company’s compliance plan next week and the retail crowd on Stocktwits expects the stock to move sharply higher, as recovery continues from the mid-November bottom.
Riot Platforms, Inc. ($RIOT)
Shares of Riot Platforms, also a Bitcoin miner, have fallen about 20% year-to-date. Retail hold mixed views about the stock, with some opining that the company has to buy Bitcoin to turn its fortunes around, just like peer MARA. Others pointed to positive technical moves in the chart that suggest scope for more upside.
Hut 8 Corp. ($HUT)
Hut 8, a vertically integrated energy infrastructure and Bitcoin mining company, also has an appreciable short interest (13.6%). The company also offers managed services, high-performance computing colocation and cloud, among others.
MicroStrategy
The Michael Saylor-led company’s shares have been on a tear, outperforming even the high-flying Bitcoin. Last week, the stock hit an all-time closing high of $543 but has pulled back 28.4% from this peak.
The short interest in MicroStrategy stock is 13.10%.
On Stocktwits, retail sentiment toward the stock has stayed upbeat (58/100).
AMC Entertainment Holdings, Inc. ($AMC)
Movie theater chain AMC is a meme stock that flourished in 2021 when the meme mania was at its feverish pitch. The stock, which went past the $700 in mid-2021, is now a pale shadow of its old self and trades at mid-single digit levels.
The stock weakness is a function of challenging entertainment industry fundamentals, among other things.
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