Quantum Computing/AI Stock goes Vertical, Short Interest Falls and becomes Battleground.

Rigetti Computing (RGTI) is a quantum computing and AI stock currently valued at nearly $10 billion. It reports negative earnings and generates minimal revenue, primarily from government grants.

Like many speculative technology names, RGTI has delivered outsized returns— 93% year-to-date and 83% this month. In 2024, the stock surged 1,450% (15x).

Short interest analytics reveal that short sellers have been steadily covering since March, coinciding with the stock’s strong upward momentum. At the same time, the float has doubled, driving down the short interest % of float.

This pattern—shorts covering into strength—is known as a momentum squeeze, a prolonged form of a short squeeze event. The short position has been cut in half, while the stock has doubled—twice. Short sellers lost as speculative frenzy eclipsed any concerns over valuation.

This explosive return, paired with short interest still at 10%, has pushed the Short Squeeze Score to 100, the highest possible reading. While most of the year has reflected a chronic slow squeeze, the past month has shown an acute short squeeze.

The Short Squeeze Score has hovered near peak levels for months, initially driven by short interest levels reaching as high as 25%.

Short sellers have incurred $1.2 billion in mark-to-market losses year-to-date, with losses accelerating recently—against a market cap of just $3 billion as of March.

Realized volatility is currently at 100—unusually high for most stocks, but typical for speculative names. In January, it peaked at 300, highlighting the stock’s extreme risk/reward profile.

Implied volatility has nearly doubled, even as realized volatility has dipped—a hallmark of a vertical move. This reflects a classic short squeeze dynamic: investors are reluctant to stay short and are paying up to cover or shift long.

Only recently has RGTI entered Battleground Stocks territory. Earlier this year, short interest was twice as high as it is now, and five times larger than long interest.

The long position then doubled, pushing the long-to-short ratio from 0.2 to 0.7—still below Battleground thresholds. Only recently, amid the squeeze, did short interest fall far enough for the ratio to approach 1.0, officially classifying RGTI as a Battleground Stock under S3’s criteria.

Previously, institutional interest was concentrated solely on the short side, with little to no participation on the long side.

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