10 Best Short Squeeze Stocks to Buy According to Analysts

7. Applied Optoelectronics, Inc. (NASDAQ:AAOI)

Short % of Float: 20.34%

Number of Hedge Fund Holders: 23

Analysts Upside Potential: 71.87%

Texas-based manufacturing company, Applied Optoelectronics, Inc. (NASDAQ:AAOI) is manufacturing and supplying fiber-optic networking products. The company’s product portfolio includes diode lasers, photodiodes, subassemblies, and related modules and equipment. It strives to stay at the forefront of technological advancements in optoelectronics by focusing on R&D. Regions served by the company include the United States, Taiwan, and China.

Applied Optoelectronics, Inc. (NASDAQ:AAOI) enters our list of best short-squeeze stocks with a high short percentage of float of 20.34% as of February 28, 2025. The company reached value after releasing its fourth-quarter earnings call, announcing an increase in CATV segment revenue, up more than 4x year-over-year. The stock price has recently rallied, potentially due to the warrant agreement with Amazon. This is expected to result in a further increase in demand as short sellers scramble to cover their positions.

Institutional interest in the stock remains high, with 23 hedge fund portfolios from Insider Monkey’s Q4 2024 database holding stakes in Applied Optoelectronics, Inc. (NASDAQ:AAOI). Analysts have given a consensus Buy rating, with a 1-year median price target of $38. The upside potential is 71.87%, which makes it the best buy for investors interested in a short squeeze.