7 High Short Interest Stocks to Trade Now and Which One Has the Best Squeeze Potential?

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TopMomentum identifying companies with top momentum scores. With a focus on highlighting high-momentum stocks and market trends, TopMomentum provides timely updates and insights to help investors capitalize on strong market performers.
 

•  08 Sep 2025
 

•   COHR  
   
  +4.44%
•   ENS  
   
  +2.45%
•   FSLR  
   
  +1.99%
•   LOW  
   
  -0.97%
•   MSFT  
   
  +2.67%

$MSFT Microsoft short percent of float has climbed 7.04% since the last report, an unusual development for a $3.7 trillion mega-cap that dominates cloud computing and AI. At first glance, the rising bearish bets seem counterintuitive. after all, Microsoft remains one of the most resilient names in tech, with Azure growing steadily and AI investments paying off. So why are traders increasingly betting against it?

The most plausible explanations lie in valuation concerns, regulatory risks, and macro hedging. With a 36.5x P/E ratio, Microsoft isn’t cheap, especially in an environment where interest rates remain elevated. Antitrust scrutiny, particularly around its AI partnerships and cloud dominance, could also be weighing on sentiment. Some traders may simply be using Microsoft as a hedge against a broader tech pullback, given its 1.04 beta, which offers market-neutral exposure without excessive volatility.

From a technical standpoint, Microsoft is stuck in a sideways grind, oscillating between its 200-day moving average at $443 and resistance near $520. The RSI at 40.61 suggests neutral momentum, neither overbought nor oversold—meaning the stock lacks a clear directional bias for now. A breakout above the 20-day moving average at $513 could force short covering, while a drop below $490 might confirm further weakness.

$LOW Lowe’s has seen its short interest rise by 7.64%, a notable shift for a home improvement retailer operating in a housing market that continues to defy recession fears. With the stock up nearly 30% from its 52-week lows, the increasing bearish bets raise questions: Why are traders betting against Lowe’s now?

Three potential reasons stand out. First, consumer spending concerns—home improvement is a discretionary category, and if unemployment ticks up, Lowe’s 22.4x P/E ratio could start looking expensive. Second, margin pressures from volatile lumber and commodity costs may be squeezing profitability. Finally, some traders might be fading the seasonal rally, betting that post-earnings weakness could follow the spring and summer demand surge.

Technically, Lowe’s is in a clear uptrend, with the price holding above all key moving averages—the 20-day at $249 and the 50-day at $235. However, the RSI at 78.32 is deep in overbought territory, suggesting a pullback could be imminent. A retreat to $260–$265 would likely attract dip buyers, while a breakdown below $250 could embolden the shorts.

$FSLR First Solar presents an intriguing contradiction: its short interest has increased by 3.84%, yet the stock remains in a strong uptrend, up nearly 75% from its 52-week lows. The disconnect between sentiment and price action suggests that while some traders are betting against the solar company, the broader market remains bullish.

The bull case for First Solar is compelling. Policy tailwinds, including IRA subsidies and global demand for renewable energy, continue to support growth. The company’s 17.38x P/E ratio is reasonable for a business expanding earnings at around 20% year-over-year. Technically, the stock is in a clear uptrend, trading above all major moving averages—the 20-day at $193 and the 50-day at $179—with an RSI of 57.43, indicating bullish momentum without being overbought.

On the other hand, the bear case revolves around valuation concerns after a near-100% rally over the past year, leading some traders to bet on a mean reversion. Additionally, supply chain risks, particularly oversupply in the solar panel market from Chinese manufacturers, could pressure margins.

The trend remains the dominant force here: First Solar uptrend is intact as long as it stays above the 50-day moving average at $179. A move above $210 could trigger a short squeeze, given the rising short interest. Conversely, a breakdown below $180 would signal a shift in sentiment.

$TXT Textron stands out in this group as the only stock with falling short interest, which has declined by 8.04%. This suggests that bears are covering their positions, possibly due to shifting fundamentals or technical improvements. The aerospace and defense contractor has been range-bound between $70 and $90 for over a year, but recent developments may explain the change in sentiment.

Defense spending tailwinds are a major factor—geopolitical tensions in Ukraine and Taiwan have increased demand for Textron’s drones and military vehicles. The company’s 18.7x P/E ratio is fair for a business with consistent earnings growth, and technically, the stock is testing the 200-day moving average around $83, with the RSI at 57.73 turning bullish.

$ENS EnerSys has experienced one of the most dramatic increases in short interest among these stocks, surging 16.07%. This aggressive bearish positioning raises questions about what traders are anticipating—and whether the stock is set up for a squeeze or a breakdown.

The potential catalysts for the short interest spike include fears of an EV slowdown - EnerSys supplies batteries for industrial and motive power applications, such as forklifts. If commercial electric vehicle adoption stalls, demand for its products could weaken. Additionally, while the 11.9x P/E ratio isn’t excessive, EPS growth has slowed to 8.77% year-over-year, which may concern growth-oriented investors. Technically, the stock is sideways, with the RSI at 74.37 in overbought territory, making it a prime candidate for a pullback.

However, EnerSys has strong support at $95, aligned with the 200-day moving average. If this level holds, the shorts could be forced to cover, potentially sparking a rally. But if $95 breaks, a drop to $85 becomes likely.

$COHR Coherent has seen its short interest jump 12.64%, yet the stock continues to climb, up over 120% from its 52-week lows. This divergence between sentiment and price action makes Coherent one of the most intriguing names on this list.

The bull case is strong Coherent lasers are critical components in semiconductor manufacturing and AI data centers, two of the fastest-growing sectors in tech. The company’s high beta of 1.54 reflects its sensitivity to market trends, and with 12.64% of the float sold short, any positive catalyst could trigger a significant squeeze. Technically, the stock is in an uptrend, trading above all key moving averages the 20-day at $98 and the 50-day at $94 with an RSI of 54.47, indicating room to run.

The bear case hinges on valuation concerns, as Coherent remains unprofitable (EPS of -$0.63), making it a speculative play. However, the technical strength suggests that momentum traders are in control for now.

The $100 level is critical holding above it keeps the uptrend intact, while a drop below $90 would signal a shift in sentiment. A breakout above $110 could accelerate the rally, making Coherent one of the most compelling short squeeze candidates on this list.

$TLRY Tilray is the wildcard in this group. Its short interest has plummeted by 20.06%, suggesting a massive short cover rally, yet the stock remains trapped in a sideways range between $0.70 and $1.20. With no earnings (P/E: N/A), negative EPS (-$2.46), and a beta of 2.03, Tilray is the ultimate speculative meme stock, driven more by sentiment than fundamentals.

The short cover rally likely stems from cannabis sector hype—any rumor of U.S. rescheduling or German legalization can send TLRY soaring. Additionally, meme stock traders may be revisiting low-float, high-short-interest names in search of quick gains.

However, without fundamental improvement, Tilray remains a gambler’s stock. The RSI at 44.99 is neutral, and the 200-day moving average at $0.86 has acted as resistance. A break above $1.20 could reignite FOMO, but a drop below $0.90 would likely lead to another collapse.

Bottom Line: Which High Short Interest Stock Offers the Best Near-Term Opportunity?

After analyzing these seven stocks, the risk-reward potential varies significantly. First Solar ($FSLR) stands out as the best near-term opportunity, its strong uptrend, policy tailwinds, and rising short interest create an ideal setup for a short squeeze. A breakout above $210 could send the stock toward $230–$250, especially if solar demand remains robust.

Coherent ($COHR) is a close second, offering high-risk, high-reward exposure to the AI and semiconductor boom. With 12.64% short interest and a breakout potential above $110, it’s a compelling speculative play, though its lack of profitability adds risk.

Lowe’s ($LOW) presents a more defensive opportunity, but its overbought RSI suggests a pullback may be needed before entering. A retreat to $260–$265 could offer a better risk-reward setup for a long position.

Microsoft ($MSFT) and Textron ($TXT) are neutral for now, both lack clear catalysts, and traders should wait for breakouts or breakdowns before taking action.

EnerSys ($ENS) is risky, while the 16.07% short interest is enticing, the fundamentals are weak, and the stock is overbought. Only aggressive traders should consider it, and even then, with tight stops.

Tilray ($TLRY) remains a lottery ticket and it's pure speculation, and unless cannabis news breaks, the stock is likely to continue its sideways grind.

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