July 11, 2025 – Shares of AMC Entertainment Holdings, Inc. (NYSE: AMC) surged more than 11% on Friday, driven by a bullish upgrade from Wedbush Securities and growing optimism about the movie theater chain’s financial recovery.
The stock’s rally has reignited speculation among retail investors about the potential for a short squeeze, reminiscent of the meme stock frenzy that propelled AMC to record highs in 2021.
With a more stable box office outlook, reduced debt concerns, and strategic expansions, is AMC poised for another explosive move?
On Friday morning, Wedbush Securities upgraded AMC from a “neutral” to an “outperform” rating, raising its price target from $3.00 to $4.00, implying a 33% upside from Thursday’s closing price.
Analyst Alicia Reese cited a more consistent movie release schedule expected through 2025 and 2026 as a key driver for the upgrade.
Blockbuster titles such as Inside Out 2, Despicable Me 4, and the highly anticipated Superman have already begun drawing crowds back to theaters, signaling a recovery in box office revenue.
Wedbush projects mid-to-high single-digit growth in box office revenue through 2026, followed by low-to-mid single-digit growth thereafter.
Reese also highlighted AMC’s leadership in premium screen offerings, noting that the company operates the largest portfolio of premium screens in North America.
This competitive edge, combined with expansion plans in the U.K. and Europe, positions AMC to capture additional market share in the coming years.
The firm also raised its second-quarter revenue estimate for AMC to $1.35 billion from $1.25 billion, with adjusted EBITDA now projected at $160 million, nearly double the prior estimate of $85 million.
Debt Restructuring Eases Financial Concerns
AMC’s financial position has also improved significantly, alleviating investor fears about near-term bankruptcy risks.
The company recently refinanced or restructured all debt obligations due in 2026, a move Wedbush described as a “significant headwind” now behind the company.
Additionally, AMC is concluding what Wedbush expects to be its final major share issuance for the foreseeable future, reducing the risk of further dilution that has weighed on the stock in recent years.
These developments have bolstered investor confidence, as evidenced by the stock’s strong performance on Friday.
On July 2, AMC announced it had secured over 80% lender support for a major debt restructuring deal, including $223 million in fresh financing and the conversion of up to $337 million of debt into equity.
CEO Adam Aron emphasized that these moves position AMC to enter 2026 “stronger than ever,” fueling bullish sentiment among retail investors.
The combination of AMC’s improved fundamentals and the Wedbush upgrade has reignited discussions about a potential short squeeze.
On X, retail investors expressed excitement over the stock’s rally, with some pointing to high short interest as a catalyst for further gains.
One user noted that short sellers have “32 days to cover,” suggesting pressure could build if the stock continues to climb.
Another post highlighted the 30 million shares of trading volume on Friday, calling it a “rerating” driven by the Wedbush upgrade and dismissing bearish sentiment with the claim that “shorts are fukked!”
While short interest data was not explicitly detailed in recent reports, historical context suggests AMC remains a heavily shorted stock.
In May 2024, borrow fees rose to around 140%, indicating significant short-selling activity that could amplify upward price movements if shorts are forced to cover.
However, analysts caution that a short squeeze is not guaranteed and depends on sustained buying pressure, a point I’ve discussed on Franknez.com several times now.
Understanding the Risks and Rewards
Despite the positive developments, Wedbush analysts tempered expectations, noting that the movie theater industry remains in a recovery phase with modest long-term growth prospects.
“To be clear, we do not see substantial growth in 2025, 2026, or beyond.
This is a low-growth industry,” Reese wrote in her research note.
AMC’s stock is still down approximately 17% year-to-date, reflecting ongoing challenges such as negative equity, years of unprofitability, and weaker theater attendance compared to pre-pandemic levels.
These factors make AMC a risky investment, even with the recent upgrade.
The Wedbush upgrade marks AMC’s first “buy” equivalent rating since 2020, a significant milestone for the company once dubbed the “original meme stock.”
With a fortified balance sheet, a promising slate of theatrical releases, and strategic growth initiatives, AMC appears better positioned to navigate the post-pandemic landscape.
However, investors should remain cautious, as the stock’s volatility and the industry’s slow recovery could temper gains.
For now, the market is buzzing with optimism, and retail investors on platforms like X are rallying behind AMC’s resurgence.
Whether this momentum translates into a full-blown short squeeze remains to be seen, but Friday’s 11% surge underscores the stock’s enduring appeal to traders betting on a comeback.
But I’m curious to know what you think — leave your thoughts below.
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