Image Source: Pixabay

Last week, on October 20, Beyond Meat (BYND) closed at 1.47 a share. Two days later, the stock spiked above $7 a share, an increase of over 400%, which many believe was caused by a short squeeze.

In the volatile world of stock trading, few phenomena capture the imagination quite like the short squeeze. It’s a dramatic reversal where the underdog stock suddenly roars back, leaving short sellers scrambling and fortunes flipping overnight.

But what exactly is a short squeeze, and why do certain stocks become prime candidates for this financial fireworks display? As of late October 2025, with market jitters high amid economic uncertainties, investors are eyeing heavily shorted names like Hertz Global Holdings (HTZ), C3.ai (AI), and Hims & Hers Health (HIMS).

These stocks boast some of the highest short interest levels as a percentage of their float—meaning a large chunk of available shares are bet against them—setting the stage for potential explosive moves if sentiment shifts.

At its core, short selling is a strategy where investors borrow shares of a stock they believe will decline in value, sell them immediately at the current price, and later buy them back at a (hopefully) lower price to return to the lender, pocketing the difference as profit. It’s a bearish bet, often used by hedge funds and traders anticipating trouble for a company, such as poor earnings or industry headwinds.

However, if the stock price rises instead—due to positive news, strong earnings, or even coordinated buying from retail investors—short sellers face mounting losses. To limit damage, they must “cover” by buying back the shares, which drives demand and pushes the price even higher. This feedback loop creates the squeeze: panic buying amplifies the rally, sometimes leading to parabolic gains.

The most infamous example is the 2021 GameStop (GME) saga, where short interest exceeded 140% of the float. Retail traders on platforms like Reddit’s WallStreetBets fueled a buying frenzy, sending the stock from under $20 to nearly $500 in days, inflicting billions in losses on short sellers like Melvin Capital.

Short squeezes aren’t just memes; they’re rooted in market mechanics and can signal deeper issues, like over-optimism among bears or undervalued fundamentals. Key indicators include high short interest (typically over 20-30% of float), low float (fewer shares available to trade), and rising borrow fees (the cost to short the stock).

In today’s environment, with AI hype, travel recovery, and telehealth booms influencing sectors, squeezes remain a wildcard. Below, we profile three stocks currently topping short interest lists, each with over 30% of their float shorted, exploring their businesses, challenges, and squeeze potential.

Hertz Global Holdings (HTZ): The Rental Giant in the Rearview Mirror

Hertz Global Holdings, Inc. (NASDAQ: HTZ) is a cornerstone of the global car rental industry, operating as one of the world’s leading providers of vehicle rental and mobility solutions. Founded over a century ago, the company—through subsidiaries like The Hertz Corporation—manages a fleet of more than 500,000 vehicles across two main segments: Americas Rental Car (RAC) and International RAC. It serves leisure and business travelers at thousands of airport and neighborhood locations worldwide, offering everything from economy cars to luxury rides and electric vehicles (EVs).

Hertz has been at the forefront of innovation, partnering with brands like Tesla to integrate EVs into its fleet and launching subscription models for urban dwellers. However, the company has weathered storms: It filed for bankruptcy in 2020 amid COVID-19 travel shutdowns, emerging in 2021 with a leaner structure but saddled with debt. By mid-2025, Hertz reported revenues of around $9 billion annually, though profitability remains elusive with net losses exceeding $2.8 billion in recent years, driven by high fleet depreciation and softening demand.

What makes HTZ a squeeze candidate? As of October 15, 2025, short interest stands at a staggering 43.22% of the float, with over 54.7 million shares shorted—reflecting skepticism about its EV pivot (which led to writedowns on unsold Teslas) and competition from peers like Enterprise and Avis. The stock trades around $5 per share, down sharply from post-bankruptcy highs, but recent stake-building by activists like Pershing Square has sparked buzz.

A surge in travel demand or successful debt refinancing could trigger covering, potentially mirroring the 2020-2021 rally that saw shares quintuple. Yet, with a market cap under $2 billion and ongoing losses, bears argue it’s a value trap—making any squeeze a high-octane gamble.

C3.ai (AI): Betting Against the AI Boom?

C3.ai, Inc. (NYSE: AI), founded in 2009 by enterprise software veteran Thomas Siebel, positions itself as a pioneer in enterprise artificial intelligence (AI), delivering a comprehensive platform to help large organizations harness AI for digital transformation.

Headquartered in Redwood City, California, the company offers over 130 pre-built, turnkey AI applications tailored for industries like manufacturing, energy, financial services, and defense. Its C3 Agentic AI Platform enables clients—ranging from Shell and the U.S. Air Force to Bank of America—to build, deploy, and operate AI models at scale, tackling use cases such as predictive maintenance, supply chain optimization, and fraud detection. Unlike consumer-facing AI tools, C3.ai focuses on “enterprise-grade” solutions, emphasizing explainability, security, and integration with legacy systems. In fiscal 2025, the firm reported accelerating revenue growth, with subscription bookings up amid the generative AI wave, though it remains unprofitable due to heavy R&D investments.

Short interest in C3.ai hovers at 31.71% of the float as of October 15, 2025, with nearly 40 million shares shorted, down slightly from summer peaks but still elevated amid broader AI sector volatility. Trading near $18 per share with a $2.4 billion market cap, the stock has underperformed peers like Palantir despite AI tailwinds, fueling bearish bets on overvaluation and competition from open-source alternatives.

A major contract win or blowout earnings—expected in November 2025—could ignite a squeeze, especially with days-to-cover at 4.5, amplifying any retail-driven rally. Optimists see C3.ai as undervalued in the AI gold rush; skeptics point to its history of missed targets. Either way, it’s a stock where technology hype meets short-seller skepticism.

Hims & Hers Health (HIMS): Telehealth’s Disruptive Darling

Hims & Hers Health, Inc. (NYSE: HIMS), launched in 2017, has redefined accessible healthcare through its telehealth platform, connecting millions to licensed providers for personalized treatments in sensitive areas like sexual health, hair loss, mental wellness, dermatology, primary care, and weight management.

What started as “Hims” for men’s issues (e.g., erectile dysfunction via sildenafil) expanded to “Hers” for women in 2018, and now offers compounded GLP-1 drugs for weight loss amid the Ozempic boom. Operating a direct-to-consumer model with online consultations, discreet shipping, and affordable generics, the company boasts over 1.5 million subscribers as of mid-2025. Its Q2 2025 results were a standout: Revenue soared 73% year-over-year to $544.8 million, with net income flipping positive at $42.5 million and adjusted EBITDA at $82.2 million, underscoring scalable growth in a post-pandemic telehealth surge.

Yet, with short interest at 36.67% of the float (over 66 million shares shorted) as of October 15, 2025, HIMS remains a battleground stock, trading around $48 per share with a $14 billion market cap. Bears cite regulatory risks around compounded drugs, margin pressures from marketing spends, and competition from traditional pharmacies, pushing short interest near all-time highs.

Days-to-cover sit at just 2.3, suggesting quick potential for a squeeze if subscriber growth accelerates or FDA approvals expand offerings. Recent acquisitions like Zava (a European telehealth provider) signal international ambitions, but valuation debates rage—forward multiples exceed 10x sales. For bulls, HIMS embodies the future of consumer health; for shorts, it’s frothy. A catalyst like Q3 earnings could decide the next chapter.

Short squeezes embody the market’s raw power dynamics: a clash between conviction and capitulation. While HTZ, AI, and HIMS offer tantalizing setups, they also carry risks—volatility, dilution, or fundamental cracks could crush longs too. Investors eyeing these should monitor borrow rates and news flow closely. In the end, the squeeze isn’t just about price; it’s a reminder that in stocks, the crowd can sometimes rewrite the script.

More By This Author:

Gold’s Impressive Rally Outperforming The S&P 500: Three Top Gold Stocks
Stocks Going Ex Dividend In October 2025
Bargain Hunters’ Delight: Four Stocks Trading Below Cash Per Share With Minimal Debt