Wolfspeed, Inc. (NYSE: WOLF), a leading manufacturer of silicon carbide (SiC) and gallium nitride (GaN) semiconductors, has captured significant attention in financial markets and online communities like Reddit’s r/wallstreetbets and r/wolfspeed_stonk.
The stock’s high short interest, volatile price movements, and potential for a short or gamma squeeze have fueled speculation and excitement among retail investors.
Today we’re going over the dynamics behind the Wolfspeed stock short squeeze narrative, including the latest short interest data, investor price targets, reasons for bullish sentiment, and the likelihood of a short squeeze occurring in the near future, particularly around the company’s upcoming earnings call on May 8, 2025.
Let’s get started!
What Is a Short Squeeze, and Why Wolfspeed?
A short squeeze occurs when a heavily shorted stock experiences a rapid price increase, forcing short sellers to buy back shares to cover their positions, further driving up the price.
A gamma squeeze, on the other hand, involves a surge in call option buying, which prompts market makers to purchase the underlying stock to hedge their positions, amplifying price gains.
Wolfspeed has been flagged as a candidate for both due to its high short interest and recent price volatility.
The buzz around Wolfspeed intensified after a Reddit user on r/wallstreetbets claimed to have turned $135,000 into $270,000 in one month by trading WOLF stock and options, expressing optimism about further gains before and after the May 8 earnings call.
Posts on X and Reddit also suggest that the stock may be experiencing a “small gamma squeeze” with potential for a larger short squeeze, drawing comparisons to the 2021 GameStop (GME) and AMC Entertainment (AMC) saga.
Latest Short Interest Data
As of mid-April 2025, Wolfspeed’s short interest is extraordinarily high, making it one of the most shorted stocks in the U.S. market. According to various sources:
- Yahoo Finance and MarketWatch report that approximately 41% of Wolfspeed’s float (about 63.31 million shares) is shorted, with nearly 30% of available shares held in short positions.
- Benzinga notes that short interest decreased slightly from 63.67 million to 63.31 million shares in the latest reporting period, representing 64.39% of the company’s publicly available shares.
- Posts on X indicate that short interest may have increased by 5% in April, pushing it above 40%, with a days-to-cover ratio of less than 4 days based on average trading volume of 21.38 million shares.
The high short interest, combined with a relatively low float (exacerbated by 99% institutional ownership in some estimates), creates a volatile setup where even modest buying pressure could trigger significant price spikes.
Investor Price Targets
Analyst and retail investor price targets for Wolfspeed vary widely, reflecting the stock’s polarizing nature:
- Analyst Price Targets:
- As of April 30, 2025, the average one-year price target for Wolfspeed has been revised downward to $8.35, a 26.63% decrease from prior estimates, according to Fintel. Earlier targets were higher, at $11.30 (February 19) and $15.61 (November 21).
- Canaccord Genuity’s George Gianarikas maintained a Buy rating with an $18 price target as of December 10, 2024, citing strategic financial decisions and growth potential.
- Roth/MKM analysts reiterated a Buy rating with a $25 target in October 2024, optimistic about customer wins in electric vehicles (EVs).
- The median analyst price target as of January 14, 2025, implies a 162% upside from current levels (around $3.55), per Yahoo Finance.
- Retail Investor Price Targets:
- Reddit users on r/wolfspeed and r/wolfspeed_stonk are far more bullish, with some speculating prices as high as $30–$50 in a short squeeze scenario and even $599 in extreme cases, though these are likely aspirational and tied to restricting share lending to short sellers.
- A user on r/wallstreetbets expressed confidence in gains leading up to and following the May 8 earnings call, without specifying a price target but implying significant upside from current levels.
The disparity between conservative analyst targets and exuberant retail investor predictions highlights the speculative fervor surrounding Wolfspeed, reminiscent of meme stock dynamics.
Why Are Investors Bullish on Wolfspeed?
Several factors contribute to the bullish sentiment among retail and some institutional investors:
- High Short Interest and Squeeze Potential:
- With 41% of the float shorted, Wolfspeed is one of the most shorted stock in the U.S., according to the Wall Street Journal. This creates a powder keg for a short squeeze if positive catalysts emerge.
- The stock’s recent 26.9% surge on April 28, 2025, attributed to short sellers covering positions, suggests early squeeze dynamics.
- CHIPS Act Funding:
- Wolfspeed received a $750 million grant through the CHIPS and Science Act to support its Siler City, NC, and New York facilities, matched by a $750 million private investment. This funding bolsters its expansion plans and eases liquidity concerns.
- The company expects its first CHIPS payment of $150–$187 million by mid-2025, further strengthening its financial position.
- Speculation on X suggests additional CHIPS Act support under a potential Trump administration could act as a catalyst.
- Strategic Positioning in Silicon Carbide:
- Wolfspeed is a global leader in silicon carbide, a critical material for high-efficiency semiconductors used in electric vehicles, AI infrastructure, and renewable energy. The company produces 60% of the world’s SiC, giving it a strong market position.
- Its 200mm wafer facility in Mohawk Valley, NY, is expected to reduce production costs and attract major EV customers, with negotiations reportedly nearing completion.
- Long-term revenue projections estimate $3 billion annually from its expanded facilities, compared to $807 million in 2024.
- Institutional and Insider Support:
- BlackRock recently increased its stake by a whopping 1.5 million shares, signaling confidence from major institutions.
- Insiders purchased $1.78 million in shares over the past year, with no sales, indicating optimism about the company’s prospects.
- Billionaire investor George Soros holds Wolfspeed among his small-cap picks with “huge upside potential.”
- Retail Investor Momentum:
- Communities like r/wolfspeed_stonk and r/wallstreetbets are driving hype, drawing parallels to GameStop’s and AMC’s 2021 squeeze. Posts emphasize high institutional ownership (99% in some claims) and coordinated shorting as opportunities for retail investors to “fight back.”
- The stock’s low price (around $4.46 as of May 2, 2025) makes it accessible for retail traders to buy shares or cheap call options, fueling speculative trading.
- Potential Catalysts:
- The May 8, 2025, earnings call is seen as a pivotal event. While Q3 guidance projects a $170–$200 million revenue and a $119–$138 million loss, any positive surprises (e.g., improved margins or customer wins) could spark a rally.
- Leadership changes, including the appointment of Robert Feurle as CEO and the departure of CFO Neill Reynolds, are viewed by some as a reset that could stabilize the company.
Probability of a Short Squeeze
Estimating the likelihood of a short squeeze involves weighing catalysts, market dynamics, and risks.
Here’s a breakdown:
- Factors Supporting a Squeeze:
- High Short Interest: At 41% of the float, Wolfspeed’s short interest is among the highest in the market, creating significant pressure if buying accelerates.
- Low Float and Institutional Ownership: With 99% of shares held by institutions in some estimates, the available float is tight, amplifying price moves.
- Retail Momentum: Social media hype and coordinated buying could drive short-term spikes, as seen in the 26.9% gain on April 28.
- Potential Catalysts: The May 8 earnings call, CHIPS Act disbursements, or EV customer wins could trigger covering.
- Historical Precedent: The stock’s 71% rally over five days in October 2024 suggests it’s capable of explosive moves.
- Factors Against a Squeeze:
- Weak Fundamentals: Persistent losses and high debt may deter long-term investors, limiting sustained buying pressure.
- Institutional Shorting: Hedged short positions by firms like BlackRock are less likely to be squeezed.
- Dilution and Volatility: New share issuances and market downturns could suppress price gains.
- Lack of Clear Catalyst: Current guidance suggests no immediate positive earnings surprise, and CHIPS funding is already priced in.
- Probability Assessment:
- Short-Term (Before/After May 8, 2025): There’s a moderate probability (40–50%) of a short squeeze or gamma squeeze in the near term, driven by retail enthusiasm, short covering, and potential earnings surprises, according to AI Poe. The recent 26% surge and options activity suggest early gamma squeeze dynamics.
- Sustained Squeeze (to $30+): A full-blown squeeze to levels like $30 or higher is less likely (20–30%) without a major catalyst, such as a blockbuster customer contract or unexpected CHIPS Act developments. Institutional short resilience and financial challenges cap upside.
- Extreme Squeeze ($100+): Scenarios like those speculated on Reddit (e.g., $599) are possible, but the least likely, per Poe (<5%), requiring unprecedented retail coordination and fundamental improvements not currently forecast.
Current Sentiment and Market Dynamics
- Retail Sentiment: Posts on Reddit and X are overwhelmingly bullish, with users comparing Wolfspeed to GameStop and predicting a “massive short squeeze.” The r/wallstreetbets user’s $135,000-to-$270,000 gain has galvanized the community, though some caution against overhyping.
- Analyst Sentiment: Wall Street is mixed, with a Moderate Buy consensus but downward-revised price targets reflecting near-term challenges. Analysts see long-term potential but urge caution due to financial risks.
- Market Performance: Wolfspeed’s share price was $3.55 as of April 30, 2025, up 38.13% week-over-week but down 90% over 10 months. Volatility is expected to continue.
Why This Matters
Wolfspeed’s high short interest, strategic importance in the SiC market, and CHIPS Act backing make it a compelling candidate for a short or gamma squeeze, particularly around its May 8, 2025, earnings call.
Retail investors are driving significant momentum, inspired by success stories like the r/wallstreetbets user who doubled their investment in a month.
However, the company’s dire financials, institutional short resilience, and dilution risks temper the likelihood of a sustained squeeze to extreme levels.
Investors considering Wolfspeed should weigh the speculative upside against substantial risks.
A small position for high-risk-tolerant traders could capitalize on short-term volatility, but long-term investors may prefer to wait for clearer signs of financial stabilization.
As with any meme stock, thorough research and disciplined risk management are critical.
But I’m curious to know what you think — Is a WOLF stock short squeeze afoot?
Leave your thoughts below.
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Also Read: Schwab Warning: Thousands Are Now at Risk of Margin Calls
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About The Author
I loaded up at $25 with 26.5k shares and doing really well after today’s close. I think without a squeeze this is a $15-20 stock since it’s the best in breed and their tech is essential for the build out of the AI storage/data centers.
That’s a lot of shares, friend. Hope you get rich as fuck 🤝