3 Short-Squeeze Stocks That Could Skyrocket in 2024

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The current year has been rewarding as compared to 2022, when growth stocks were decimated. As we inch closer to the new year, it’s time to relook at the portfolio and build a strategy to boost returns. With macroeconomic challenges sustaining, I would remain overweight on blue-chip dividend stocks. At the same time, there needs to be some exposure to risky bets to ensure that portfolio returns comfortably beat inflation and index returns. One strategy is to expose a small part of the portfolio to short-squeeze stocks.

Since the meme stock rally of 2021, stocks with high, short interest as a percentage of free-float have caught investor attention. However, not all stocks with a high, short interest skyrocket. This column discusses three potential short-squeeze stocks that are likely to double in 2024.

In my view, these stocks have average to weak fundamentals. However, the downside is overdone and positive business news can be a catalyst for a massive rally. Let’s discuss the reasons to be bullish on these stocks.

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Archer Aviation (ACHR)

Person holding cellphone with logo of American eVTOL aircraft company Archer Aviation Inc. (ACHR) on screen in front of webpage. Focus on phone display. Unmodified photo.
Person holding cellphone with logo of American eVTOL aircraft company Archer Aviation Inc. (ACHR) on screen in front of webpage. Focus on phone display. Unmodified photo.

Source: T. Schneider / Shutterstock.com

Archer Aviation (NYSE:ACHR) has been among the hot stocks this year, with an upside of 172%. The stock has, however, cooled off from August highs of $7.50 and looks attractive at current levels of $5.30. Besides the fundamental factors, ACHR stock has a short interest of 26%. It’s among the best short-squeeze candidates to buy for the next year.

Coming to the business developments, it’s been an exciting year for Archer. The company expects to commercialize eVTOL aircraft in 2025. It’s worth noting that Archer already has contracts worth $142 million from the United States Air Force.

Another catalyst is global expansion. Archer and Abu Dhabi Investment Office plan to launch all-electric air taxi across the UAE in 2026. Furthermore, the company is also entering India in 2026 through a collaboration with InterGlobe Enterprises. The growth outlook for the next few years is robust, and Archer has some big investors backing the company’s plans. With these positives, I expect a massive rally in the coming quarters.

Lucid Group (LCID)

Closeup of the Lucid logo seen at a Lucid showroom in Millbrae, California. LCID stock.
Closeup of the Lucid logo seen at a Lucid showroom in Millbrae, California. LCID stock.

Source: Tada Images / Shutterstock

If I had to pick some of the top electric vehicle stocks for the long term, I would not include Lucid Group (NASDAQ:LCID) in the list. However, LCID stock looks deeply oversold after a correction of 40% for year-to-date. With a short interest that’s 25% of the free-float, it’s among the short-squeeze stocks to buy.

Recently, Lucid announced Q3 2023 results and reported revenue of $137.8 million. The company delivered 1,457 vehicles during the quarter. However, Lucid has revised the production outlook for the year on the downside to 8,000 to 8,500 vehicles. Muted growth in production and deliveries coupled with cash burn is a concern.