State of the Shorts
This week's short book is almost a pure-play bet against speculative, narrative-driven tech: roughly 19 of the 25 names sit in Information Technology, and they cluster into three unmistakable baskets — AI/semiconductor momentum (AXTI, AEHR, AAOI, ALAB, NVTS, QUIK, AIP, ALMU, MRAM, NBIS, LSCC), Bitcoin-levered crypto miners/treasuries (HUT, WULF, CIFR, MSTR, RIOT, CORZ — six names), and quantum/space/fuel-cell moonshots (ARQQ, INFQ, SPCE, BE), rounded out by thematic one-offs in uranium (UEC), 3D printing (VELO), rare earths (ALOY) and a healthcare disruptor (AGL). The shared data signature is extreme: valuations detached from any earnings base (forward EV/EBITDA of 200x at AXTI, 678x at AEHR, 4,121x at AIP), prices stretched far above the model's own targets (AXTI ~2x, AEHR ~3.4x, SPCE ~8.7x OM target), and businesses that are actively burning cash rather than generating it (FCF margins of -764% at HUT, -2,200% at WULF, -18,466% at SPCE, with negative ROIC nearly across the board). Layered on top is heavy dilution (SPCE +104% shares, AAOI +48%, AXTI +23% in a year) and crowded, high-beta squeeze risk (short interest above 20% at SPCE and WULF, betas of 3–5). Read against the long book — cash-generative hard assets, gold, energy, and cheap international compounders — the composite is making one coherent macro statement: it is positioned for the deflation of the speculative-growth bubble. The model is fading the most expensive, most retail-crowded, most cash-negative corners of the market — the AI-capex euphoria, the crypto-as-treasury trade, the quantum/space lottery tickets — and betting that as risk appetite and liquidity tighten, multiple compression hits narrative stocks first while profitable real-economy assets hold. In short: long cash flow, short stories — a late-cycle, anti-momentum, value-over-growth stance that expects the gap between what's profitable and what's merely exciting to finally close.
The Top 1% Shorts (25 Worst Stocks Right Now)
#1 AXTI — AXT, Inc. — The Most Stretched Name In The Market
The Story
A compound-semiconductor materials maker that became an AI-supply-chain darling. The narrative did the heavy lifting; the income statement never showed up.
Why Investors Are Excited
Substrates for the AI and photonics boom. If the buildout is real, the picks-and-shovels suppliers win.
Why The Model Hates It
The single highest OM2 Short Score in the book: 93.7. Score -232, Super Multiple -437. It trades at more than 2x the model's own target. Revenue is flat (-0.1%), FCF margin is -46%, ROIC is negative, grade F-.
Three Bull Arguments
The AI/photonics substrate demand wave is genuine and could inflect revenue fast.
Balance sheet grades B — runway to wait for the cycle.
11.4% short interest plus a beta near 3 — any good headline triggers a violent squeeze.
Three Bear Arguments
200x forward EBITDA and 36x sales on a no-growth, cash-negative business.
A move to the OM target implies roughly -52% downside.
No earnings floor — negative ROIC and negative free cash.
Oddsmaker Verdict
The textbook short: a great story, no numbers, a stretched price. High conviction, manage the squeeze.
#2 HUT — Hut 8 Corp. — Leverage On A Leverage Bet
The Story
A Bitcoin miner repackaging itself as an AI/HPC infrastructure play. Two narratives, one balance sheet, enormous cash burn.
Why Investors Are Excited
It goes up when Bitcoin goes up — now with an AI-hosting kicker. Revenue grew 114%.
Why The Model Hates It
OM2 Short of 93.5. Score -174, Super Multiple -389. Top-decile compression and squeeze risk. FCF margin -764%, ROE -27%. Trades at 70x forward EBITDA, 40x sales.
Three Bull Arguments
A Bitcoin melt-up sends miners up faster than the coin.
The AI/HPC pivot could re-rate it from "miner" to "data-center operator."
14.2% short interest and a beta of 4 make squeezes brutal.
Three Bear Arguments
A -764% FCF margin is the business model right now.
When Bitcoin rolls over, levered miners fall harder.
-39% to target, with no profitability to cushion the fall.
Oddsmaker Verdict
High-conviction short — but only with hard risk controls. This thing moves both ways.
#3 AEHR — Aehr Test Systems — Hope Priced At 678x
The Story
A small semiconductor test-equipment maker that rode the EV and AI-chip wave, then watched its end-markets cool while the multiple stayed in orbit.
Why Investors Are Excited
Wafer-level test and burn-in for silicon carbide and AI chips — a niche that explodes if those markets re-accelerate.
Why The Model Hates It
Among the most negative profiles in the book: Score -313, Super Multiple -543. Revenue shrinking (-26%), ROE and ROIC negative, 678x forward EBITDA.
Three Bull Arguments
Balance sheet grades A- — plenty of cash to survive the air pocket.
A SiC/AI-test recovery flips declining revenue to growth quickly.
Beta over 5 and 13% short interest — extreme squeeze fuel.
Three Bear Arguments
678x forward EBITDA requires a recovery revenue is moving away from.
-26% forward growth as the market prices acceleration.
-70% to target — one of the largest implied downsides on the board.
Oddsmaker Verdict
A wildly overvalued microcap. Massive downside, massive volatility — size accordingly.
#4 AAOI — Applied Optoelectronics — The Optical Story Outrunning Its Numbers
The Story
An optical-components maker reborn as an AI-datacenter connectivity supplier. The revenue is finally moving — the profits aren't.
Why Investors Are Excited
AI datacenters need optical interconnects, and AAOI is in the supply chain. Revenue grew 64%. The model flags Insider grade A+ — insiders aren't bailing.
Why The Model Hates It
OM2 Short of 91.2. Score -151, Super Multiple -303. Despite 64% growth, ROE and ROIC are negative, FCF margin -9%. Share count jumped 48% in a year.
Three Bull Arguments
Real 64% revenue growth into genuine AI-optical demand.
Insider A+ — the people who know most aren't selling.
A margin inflection on that revenue base breaks the short outright.
Three Bear Arguments
Growth without profit: 64% top-line, still negative returns on capital.
48% share-count increase — shareholders diluted hard.
-34% to target even crediting the growth.
Oddsmaker Verdict
The most legitimate bull case on the list. Give it the most respectful sizing.
#5 ALAB — Astera Labs — The Quality Short
The Story
A genuinely excellent AI-connectivity chip company the model is shorting for one reason only: the price.
Why Investors Are Excited
A real leader in AI-rack connectivity, growing 104% with elite margins. The bulls aren't wrong about the business.
Why The Model Hates It
OM2 Short of 91.0 — but Value grades F-. The only short with Quality A, a 51% FCF margin, and 21% ROIC. The objection is pure valuation: 90x forward EBITDA, 35x sales.
Three Bull Arguments
The business is real — Quality A, 21% ROIC, 51% FCF margin.
104% revenue growth can grow into the multiple if AI-capex holds.
Beta of 2.75 — it can compound right through the valuation.
Three Bear Arguments
A great business at 90x EBITDA can still fall 30%+ without anything breaking.
-33% to the model's fair value.
AI-semi sentiment is the fuel — any cooling hits the richest multiples first.
Oddsmaker Verdict
A valuation short on a real company — highest risk of right thesis, wrong timing. Smallest, most patient sizing.
The Story
A gallium-nitride power-chip company sold as the future of EV and AI power delivery — while its actual revenue collapses.
Why Investors Are Excited
GaN is a legitimately promising power-semiconductor technology with design-win optionality in EVs, chargers, and AI power.
Why The Model Hates It
Score -350, Super Multiple -490. Target $5 against a ~$23 price. Revenue -45%, ROE and ROIC both -35%, FCF margin -111%, 110x sales.
Three Bull Arguments
GaN adoption is a real secular trend with large end-markets.
Balance sheet A- — it can fund itself through the trough.
14.6% short interest, beta 3.6 — squeeze conditions extreme.
Three Bear Arguments
-78% to target — the price roughly quartering.
Revenue is falling -45%, gutting the multiple's assumption.
Deep cash burn and a 21% share-count jump — no floor.
Oddsmaker Verdict
A broken growth story at a fantasy multiple. High downside, high squeeze risk.
#7 QUIK — QuickLogic Corporation — The Microcap With No Floor
The Story
A tiny programmable-chip and embedded-FPGA IP company wearing an AI-optionality label on a failing balance sheet.
Why Investors Are Excited
Embedded FPGA IP has a place in AI/edge compute, and a single design win can move a microcap fast.
Why The Model Hates It
OM2 Short of 88.2. Score -176, Super Multiple -314. Value F-, Moat F-, Balance Sheet F. Revenue -23%, ROE -49%, ROIC -41%.
Three Bull Arguments
eFPGA IP is strategically relevant to AI/edge designs.
A single defense or AI design win can re-rate a microcap overnight.
Thin float and 5% short interest — illiquidity cuts both ways.
Three Bear Arguments
The balance sheet grades F — no cushion.
-23% revenue growth against a turnaround multiple.
-39% to target with deeply negative returns on capital.
Oddsmaker Verdict
An overvalued microcap with a failing balance sheet. Real downside, real illiquidity risk.
#8 AIP — Arteris, Inc. — The Negative-Infinity Returns Short
The Story
A network-on-chip IP licensor positioned as essential plumbing for AI chip design — with returns on capital that defy belief.
Why Investors Are Excited
Every AI chip needs interconnect IP, and Arteris licenses exactly that. Revenue grew 26% into a structural tailwind.
Why The Model Hates It
OM2 Short of 88.0. Score -180, Super Multiple -340. ROE and ROIC of -640%. Forward EBITDA multiple over 4,000x. Grade F-.
Three Bull Arguments
NoC IP is genuinely embedded in the AI-chip design cycle.
26% revenue growth with real AI-design exposure.
Lower short interest (3.6%) — room for the narrative to run.
Three Bear Arguments
4,121x forward EBITDA — no version of this is cheap.
-640% ROIC — the business destroys capital as it grows.
-40% to fair value.
Oddsmaker Verdict
Growth can't rescue a 4,000x multiple. A clean short on valuation math.
#9 SPCE — Virgin Galactic — The Largest Implied Downside On The Board
The Story
A space-tourism dream that has become a serial-dilution machine. The vision is intact; the business is evaporating.
Why Investors Are Excited
Commercial spaceflight is a genuine frontier, and beaten-down lottery tickets attract dreamers and squeeze-hunters alike.
Why The Model Hates It
The most negative Score in the top 10: -395, Super Multiple -445. Target $0.40 against a ~$3.48 price. Revenue -76%, FCF margin -18,466%, ROE -105%, share count +104% in a year.
Three Bull Arguments
Next-gen Delta-class ships could restart commercial flights and revenue.
21.5% short interest, beta 2.9 — lottery tickets can triple before zero.
Any credible commercialization headline detonates the bears.
Three Bear Arguments
-88% to target — the single largest implied downside in the book.
A -18,466% FCF margin means dilution is the only fuel.
-76% revenue growth — shrinking, not scaling.
Oddsmaker Verdict
Fundamentally broken, biggest downside and worst squeeze risk. Tiny size or stay out.
#10 WULF — TeraWulf Inc. — The Other Crypto Miner
The Story
A clean-energy Bitcoin miner pivoting to AI/HPC hosting — the same playbook as Hut 8, the same cash-burn problem.
Why Investors Are Excited
Low-cost power plus an AI-datacenter pivot is the hottest narrative in crypto-adjacent infrastructure. Revenue grew 27%.
Why The Model Hates It
OM2 Short of 87.3. Score -165, Super Multiple -364. Value F-, Moat F-, FCF margin -2,200%, ROE -2,216%. Trades at 65x forward EBITDA, 32x sales.
Three Bull Arguments
The AI/HPC hosting pivot could re-rate it away from pure mining.
Cheap, clean power is a genuine cost advantage.
22% short interest, beta 3 — a crypto rally torches shorts.
Three Bear Arguments
A -2,200% FCF margin is the entire story.
Levered to Bitcoin's downside — falls harder than the coin.
-37% to target with no profitability to break the fall.
Oddsmaker Verdict
High-conviction short tethered to Bitcoin's tape. Pair it small, respect the volatility.
#11 CIFR — Cipher Mining — Bitcoin Burn With An AI Veneer
The Story
Another Bitcoin miner racing to slap an HPC/AI-hosting label on its datacenters before the market notices the cash burn.
Why Investors Are Excited
Cheap-power Bitcoin mining plus a pivot to AI compute — and revenue grew 38%, with the model flagging Growth A+.
Why The Model Hates It
OM2 Short of 86.0. Score -94, Super Multiple -311. The growth is real, but FCF margin is -1,433%, ROE -122%, ROIC -29%. Value F-, Quality F-, Timing F-. Trades at 36x sales.
Three Bull Arguments
Growth A+ — the top line is genuinely accelerating.
An AI/HPC hosting contract would re-rate the whole story.
12.8% short interest, beta 3.8 — squeeze-prone on any Bitcoin rally.
Three Bear Arguments
A -1,433% FCF margin — it consumes cash faster than it makes it.
-21% to the model target with no earnings to defend the floor.
Pure leverage to Bitcoin's tape; it amplifies the downside.
Oddsmaker Verdict
The same disease as HUT and WULF in a slightly earlier stage. Short the burn, hedge the coin.
#12 ALMU — Aeluma, Inc. — The Photonics Lottery Ticket
The Story
A tiny compound-semiconductor / photonics startup riding the AI and sensing narrative far ahead of any meaningful revenue.
Why Investors Are Excited
Photonic chips for AI, LiDAR, and sensing — a frontier technology with enormous theoretical end-markets. Revenue grew 43%.
Why The Model Hates It
OM2 Short of 83.3. Score -170, Super Multiple -310. Quality F, negative EBITDA (multiple is meaningless), ROE -21%, ROIC -20%. Trades at 61x sales. Grade F-.
Three Bull Arguments
Balance sheet grades A — cash to fund the science.
43% revenue growth on a tiny base — optionality is real.
17.1% short interest, beta 3.7 — extreme squeeze setup.
Three Bear Arguments
61x sales on a company with no profits and negative EBITDA.
-38% to the model target.
14.7% share-count growth — the science is funded by dilution.
Oddsmaker Verdict
A pre-revenue-quality story at a post-success price. Small, squeeze-aware short.
#13 AGL — agilon health, inc. — The Value-Based-Care Blowup
The Story
A value-based-care enabler for primary-care physicians that the market keeps pricing for a turnaround the numbers refuse to deliver.
Why Investors Are Excited
Medicare Advantage and value-based care are huge structural themes, and AGL is a pure-play on physician enablement. The model flags Insider A+.
Why The Model Hates It
OM2 Short of 82.8. Score -183, Super Multiple -333. The lone Health Care name. Revenue -2.8%, ROE -110%, ROIC -94%, FCF margin negative. Trades at 104x forward EBITDA. Beta of 6.55 — the highest in the book.
Three Bull Arguments
Insider A+ — insiders are buying into the weakness.
Value-based care is a durable, government-tailwind theme.
Balance sheet B — it has room to fix the cost structure.
Three Bear Arguments
-41% to target with revenue actually declining.
ROE -110%, ROIC -94% — medical-cost ratios are eating the model alive.
A beta of 6.55 means brutal two-way volatility.
Oddsmaker Verdict
A broken-economics healthcare story. The insider signal is the one thing that earns it caution.
#14 VELO — Velo3D, Inc. — The 3D-Printing Survivor Bet
The Story
A metal additive-manufacturing company for aerospace and defense that nearly died, got recapitalized, and is now priced like the comeback is already complete.
Why Investors Are Excited
Metal 3D printing for rockets and defense parts is a real, growing niche, and the post-restructuring story attracts turnaround hunters. Insider B+.
Why The Model Hates It
OM2 Short of 81.5. Score -285, Super Multiple -342. Value F-, Moat F-, Balance Sheet F-. FCF margin -79%, ROE -126%, ROIC -80%. Target $9.50 against a ~$26 price.
Three Bull Arguments
Aerospace/defense additive manufacturing is a genuine secular tailwind.
Insider B+ and a recapitalized balance sheet give it a second life.
24.5% revenue growth shows the order book is recovering.
Three Bear Arguments
-64% to target — one of the largest implied drops.
Balance Sheet F- — the survival question isn't fully closed.
87% share-count growth — the recap was pure dilution.
Oddsmaker Verdict
A survivor priced like a winner. Heavy downside, but watch the insider buying.
#15 MSTR — Strategy Inc — The Bitcoin Holding Company
The Story
The original Bitcoin-treasury company — a software shell wrapped around a leveraged pile of BTC, trading at a premium to the coins it holds.
Why Investors Are Excited
It's the purest large-cap proxy for leveraged Bitcoin exposure, and the premium-to-NAV has historically expanded in bull markets.
Why The Model Hates It
OM2 Short of 78.9. Score -76, Super Multiple -316. Value F-, Moat F. ROE -31%, ROIC -27%. Trades at 840x forward EBITDA and 113x sales. Target $101 against a ~$122 price.
Three Bull Arguments
A Bitcoin bull run expands both the holdings and the NAV premium.
The most liquid, most recognized leveraged-BTC vehicle.
10.7% short interest, beta 2.8 — squeeze risk into any crypto rally.
Three Bear Arguments
-17% to target, and the premium-to-NAV can collapse fast.
The underlying business produces no real cash; it's a leveraged coin wrapper.
30% share-count growth — perpetual issuance to buy more BTC dilutes holders.
Oddsmaker Verdict
A short on the premium, not on Bitcoin. Only works paired against the coin.
#16 UEC — Uranium Energy Corp. — The Uranium Story Without The Production
The Story
A US uranium developer riding the nuclear-renaissance narrative while its current production and revenue go the wrong way.
Why Investors Are Excited
Nuclear is back in favor — AI power demand, data centers, and energy security all point to higher uranium prices. UEC is a domestic pure-play. Timing grades A (strong chart).
Why The Model Hates It
OM2 Short of 78.8. Score -74, Super Multiple -314. Revenue -70%, ROE and ROIC negative. Trades at 535x forward EBITDA and 93x sales. Value F-. Target $9.90 against a ~$11.86 price.
Three Bull Arguments
The nuclear/uranium thesis is structural and gaining momentum.
Timing A — the chart has the wind at its back.
11.2% short interest can fuel a squeeze on any uranium spike.
Three Bear Arguments
-70% revenue — it's a developer, not yet a real producer.
535x EBITDA prices years of execution that hasn't happened.
-16% to target, with negative returns on capital today.
Oddsmaker Verdict
A great theme, a not-yet business. The strong chart (Timing A) makes this the most dangerous short to be early on.
#17 ARQQ — Arqit Quantum — The Quantum-Encryption Moonshot
The Story
A quantum-safe encryption company promising to secure the post-quantum world, trading on the promise rather than the P&L.
Why Investors Are Excited
Post-quantum cybersecurity is a real, government-funded priority, and revenue exploded 351% off a tiny base. Insider A+.
Why The Model Hates It
OM2 Short of 78.0. Score -173, Super Multiple -313. Quality F-, ROE -220%, ROIC -206%. Trades at 59x sales. Target $13.70 against a ~$22 price.
Three Bull Arguments
Insider A+ — insiders are backing the story.
351% revenue growth signals early commercial traction.
Balance sheet A- and 10.3% short interest — funded, and squeeze-prone.
Three Bear Arguments
ROIC -206% — the economics don't exist yet.
-39% to target.
23% share-count growth — the runway is paid for in dilution.
Oddsmaker Verdict
A frontier-tech lottery ticket at a stretched price. The insider buying earns it a careful, small short.
#18 ALOY — REalloys Inc. — The Rare-Earth Newcomer
The Story
A rare-earth and specialty-alloys name riding the critical-minerals/supply-chain-security wave with almost no operating history to point to.
Why Investors Are Excited
Rare earths are a national-security priority and a hot policy theme. Insider A+, Timing B (decent chart).
Why The Model Hates It
OM2 Short of 76.6. Score -161, Super Multiple -301. Value F-, Moat F-, Quality F-. ROE -471%, ROIC -433%. Trades at 280x sales — among the most extreme in the book. Target $9.80 against a ~$15.35 price.
Three Bull Arguments
The critical-minerals theme has government and policy tailwinds.
Insider A+ and Timing B — insiders buying, chart cooperating.
Low 4.9% short interest — uncrowded if the story catches.
Three Bear Arguments
280x sales — a valuation untethered from any fundamentals.
ROIC -433% — capital destruction at scale.
-36% to target with effectively no revenue base.
Oddsmaker Verdict
A theme in search of a business. Extreme overvaluation, but the insider/chart combo demands respect.
#19 INFQ — Infleqtion, Inc. — The Quantum De-SPAC
The Story
A quantum-computing and atomic-sensing company freshly arrived via SPAC, priced on a decade-out vision.
Why Investors Are Excited
Quantum computing and quantum sensing are the ultimate frontier-tech narratives, and INFQ is a rare public pure-play.
Why The Model Hates It
OM2 Short of 75.3. Score -172, Super Multiple -312. Quality D-, Growth D-, FCF margin -130%. Trades at 58x sales. A 517% share-count jump — classic de-SPAC dilution. Target $8.20 against a ~$13.40 price.
Three Bull Arguments
Balance sheet A — funded for the long research road.
Quantum is a genuine, government-backed long-term theme.
Very low 1.8% short interest — uncrowded if sentiment turns.
Three Bear Arguments
517% share growth — the float is exploding via dilution.
-130% FCF margin with no revenue growth to show for it.
-39% to target on a decade-out story.
Oddsmaker Verdict
A pre-commercial vision at a stretched price. Low squeeze risk makes it a cleaner short than the crowded names.
#20 MRAM — Everspin Technologies — The Niche-Memory Fade (Near Pass)
The Story
A specialty MRAM memory chipmaker — a real, profitable niche business that the model thinks is simply too expensive.
Why Investors Are Excited
MRAM is differentiated non-volatile memory with defense and industrial design wins, and the company is actually near breakeven.
Why The Model Hates It
OM2 Short of 90.8 (the top near-pass). Score -147, Super Multiple -202. Unlike most shorts, it's barely profitable (ROE/ROIC ~0.4%) — but it trades at 31x forward EBITDA on just 16% growth. Timing F-. Target $17.80 against a ~$26.65 price.
Three Bull Arguments
A real product with sticky defense/industrial customers.
Balance sheet A- — financially stable, unlike the burners.
10.6% short interest, beta 2.9 — squeeze potential.
Three Bear Arguments
31x EBITDA on a 16%-growth niche memory business is rich.
-33% to target.
Razor-thin returns (ROE 0.4%) leave no margin for error.
Oddsmaker Verdict
A valuation fade on a legitimate small-cap. Lower-conviction than the burners, but cleaner economics.
#21 BE — Bloom Energy — The Fuel-Cell Faith Trade (Near Pass)
The Story
A solid-oxide fuel-cell maker pitched as the answer to AI-datacenter power demand, priced for a future that hasn't reached the bottom line.
Why Investors Are Excited
On-site fuel-cell power for AI datacenters is a red-hot narrative, and revenue grew 56% with the model flagging Growth A+.
Why The Model Hates It
OM2 Short of 90.1. Score -105, Super Multiple -262. Value F-. Despite 56% growth, ROE is 1.3% and ROIC 0.2% — barely positive. Trades at 95x forward EBITDA. Beta 3.89. Target $224.50 against a ~$293.50 price.
Three Bull Arguments
Growth A+ and 56% revenue growth into the AI-power theme.
Datacenter-power demand is real and accelerating.
10% short interest, beta 3.9 — explosive on any good news.
Three Bear Arguments
95x EBITDA on near-zero returns on capital.
-24% to target.
22.5% share-count growth funding the buildout.
Oddsmaker Verdict
A great theme priced years ahead of the economics. High-beta short — needs tight risk management.
#22 RIOT — Riot Platforms — The Crypto Miner The Crowd Knows
The Story
One of the best-known Bitcoin miners, now chasing the AI/HPC pivot like its peers — same burn, bigger spotlight.
Why Investors Are Excited
A liquid, high-profile way to play Bitcoin mining plus an AI-datacenter option. Revenue grew 42%.
Why The Model Hates It
OM2 Short of 89.8. Score -97, Super Multiple -275. Value F-, Moat F. FCF margin -109%, ROE -33%, ROIC -25%. Target $21.40 against a ~$27.30 price.
Three Bull Arguments
42% revenue growth and scale among miners.
An AI/HPC hosting deal re-rates it instantly.
16.5% short interest, beta 3.8 — squeeze-prone on any BTC pop.
Three Bear Arguments
-109% FCF margin — still burning cash.
-22% to target.
Pure leverage to Bitcoin's downside.
Oddsmaker Verdict
Same miner thesis, more crowded. Short the burn, but the float is squeeze-heavy.
#23 NBIS — Nebius Group — The AI-Cloud Hypergrowth Short (Near Pass)
The Story
A Yandex-descended AI-cloud and GPU-infrastructure company growing at a blistering pace — and spending even faster.
Why Investors Are Excited
It's a near-pure-play on AI-cloud capacity, growing revenue 575% with Moat A- and Quality B+ — genuinely differentiated among the shorts.
Why The Model Hates It
OM2 Short of 89.4. Score -173, but a smaller Super Multiple (-196). Positive ROE (14%) and ROIC (8%) — but FCF margin is -2,850% as it builds datacenters, and it trades at 13x sales. Target $171.90 against a ~$280 price.
Three Bull Arguments
Moat A-, Quality B+ — the best business quality on the short list.
575% revenue growth and real positive returns on equity.
17.3% short interest, beta 2.7 — a squeeze magnet if AI-cloud demand surprises.
Three Bear Arguments
-2,850% FCF margin — the capex is consuming everything.
-39% to target.
AI-infrastructure sentiment is the multiple; any cooling compresses it hard.
Oddsmaker Verdict
The highest-quality short here after ALAB — a valuation/cash-burn fade on a real growth story. Patient, hedged sizing.
#24 CORZ — Core Scientific — The Pivot-Story Miner (Near Pass)
The Story
A Bitcoin miner that emerged from bankruptcy and reinvented itself around AI/HPC datacenter hosting — the pivot is the entire bull case.
Why Investors Are Excited
A high-profile AI-datacenter-hosting transformation story, with a marquee compute customer underwriting the pivot.
Why The Model Hates It
OM2 Short of 88.6. Score -183, Super Multiple -207. Quality F-, Value D+. Revenue -14%, FCF margin -144%, ROE and ROIC both -130%. Target $16.90 against a ~$28.70 price. Short interest 22.6% — among the highest in the book.
Three Bull Arguments
The AI/HPC hosting pivot is real and contractually anchored.
Post-bankruptcy, the balance sheet has been reset.
22.6% short interest, beta 3.2 — a top squeeze candidate.
Three Bear Arguments
Revenue is declining -14% during the supposed transformation.
ROIC -130% — the economics aren't there yet.
-41% to target.
Oddsmaker Verdict
A pivot priced as a fact. Big downside, but the 22.6% short interest makes it a squeeze powder keg.
#25 LSCC — Lattice Semiconductor — The Quality-Chip Valuation Fade (Near Pass)
The Story
A respected low-power FPGA maker — a real, cash-generative chip business — that the model is fading purely on price after a cyclical earnings dip.
Why Investors Are Excited
Low-power programmable logic is a strong niche with secular content-growth tailwinds, and Lattice has a loyal customer base. Insider B+.
Why The Model Hates It
OM2 Short of 88.4 (lowest in the strict-quality tier). Score -61, Super Multiple -225 — the least negative on the list. It's profitable with a 39% FCF margin, but EBITDA is declining (-24%), growth grades F+, and it trades at 66x forward EBITDA. Value F-. Target $124.80 against a ~$144.65 price.
Three Bull Arguments
A real, 39%-FCF-margin business — not a burner.
Balance sheet A-, Insider B+ — financially sound, insiders supportive.
A cyclical chip recovery flips declining EBITDA back to growth.
Three Bear Arguments
66x EBITDA while EBITDA is falling -24%.
-14% to target — the smallest downside on the board.
Growth F+ — the cyclical trough may not be over.
Oddsmaker Verdict
The mildest short in the book — a valuation fade on a quality cyclical. Lowest conviction, lowest downside; more a trim than a slam.
Thank you for reading. Come back next week for a new round of the 1% Worst Stocks in the market.
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