2 Short Squeezes for Summer Speculation: What the Bears Are Getting Wrong

Key Points

• Wendy's, with 33% short interest, could see a short squeeze as new CEO Bob Wright pursues digital initiatives and international growth ahead of August earnings.
• AST Space Mobile faces short interest above 20% despite long-term 5G contracts with carriers like Verizon and Vodafone and nearly $4 billion in liquidity.
• Both companies carry Reduce consensus ratings, but underlying analyst data show majority Hold or Buy ratings and potential upside in their price targets.

Short sellers are often among the most disciplined investors on Wall Street, willing to sell into markets that everyone else is buying.

The question is what happens when the short sellers get the story wrong. The answer is often a sharp stock price correction. In this case, the correction would be to higher levels, because a broken bear thesis can be good news for investors.

Wendy’s: Industry Veteran Takes Charge

Wendy’s NASDAQ: WEN is a high-profile short-squeeze candidate with its 33% short interest a target of meme-stock investors. The cause for short interest is simple: struggling growth, margin pressures, and lack of traction following managerial missteps. The caveat for short-sellers is that their view is often rear-oriented, focused on past results and fails to account for strategic shifts. As it stands, short interest is likely to remain high, keeping pressure on the market, but catalysts ahead could trigger a squeeze.

Among them is new CEO Bob Wright. He is not only a veteran of Wendy’s, having served in several capacities before moving on to new opportunities, but is also credited with reinvigorating other brands. Those include Potbelly Corporation, which he grew and later sold for a profit. Among the efforts at Wendy’s are store-count rationalization, unlocking international growth opportunities and prioritizing digital-first storefronts. Evidence of his impact may be seen in the Q2 earnings release expected in mid-August.

Digital is a critical factor, expected to drive strength on both the top and bottom lines, with impacts evident quickly after deployments. Notable success stories utilizing a digital-heavy presence include industry leader McDonald’s, which underpins store traffic and growth with digital; Chipotle Mexican Grill, which does the same, also utilizing digital to unlock margin; and Starbucks, which is following in Chipotle’s footsteps.

Headwinds for Wendy’s stock price include analysts' sentiment, but take that with a grain of salt. While analysts have reduced ratings and price targets over the trailing 12 months, lowering the consensus to Reduce, the internal data are not uniformly bearish. Coverage remains solid, with 24 analysts tracked and ratings spread across Buy, Hold and Sell or equivalent categories. The price target, likewise, reflects a wide range of outcomes, given that the low end sets a floor near 2026’s lows, with the low end setting a floor near 2026’s lows and the high end forecasting substantial upside if the turnaround gains traction.

AST SpaceMobile’s Liquidity Supports Future Growth

AST Space Mobile NASDAQ: ASTS is another high-profile short-squeeze candidate with short interest trending higher, hitting record levels in 2026 and running hot at above 20%. Short sellers are leaning into this trade because of cash burn, high valuation, and execution risk, as highlighted by the loss of the BlueBird 7 satellite. It failed to reach proper orbit through no fault of its own. The biggest impact is on the timing of service rollout, but it is limited. Not only will the company recoup the loss through insurance, but subsequent satellites are forecast to approach twice the peak speeds.

What the shorts get wrong is that this near-term execution story is backed up by solid institutional support and long-term contracts with tier-one 5G service providers. It underpins a shift in coverage from land-based towers, which limit service, to space-based direct-to-phone 5G access and global coverage for everyone, all the time. It is mission-critical to future telecommunications, including bridging the infrastructure gap between ground- and space-based operations.

AST Space Mobile’s reported analyst rating is equally misleading. Pegged at Reduce, the bulk of the 10 ratings MarketBeat tracks are Hold or better, with the consensus target forecasting a modest upside. Upcoming catalysts include the August earnings release, in which strategic progress is expected. Among the critical details will be the cash burn, which the bears will highlight, and the cash position, which is sufficient to sustain operations for the foreseeable future. Not only does the company have nearly $4 billion in liquidity, but many of its projects also benefit from non-dilutive government awards.

Looking ahead, ASTS has a moat that should ensure its long-term success. By focusing on Earth-bound frequencies, massive space-based “cell towers," and direct-to-phone connections, it can provide infrastructure rather than compete with the major carriers. In this light, its more than 40 existing agreements with carriers, including Verizon NYSE: VZ and Vodafone, provide instant, no-cost access to millions of subscribers itching for better, more consistent coverage. Starlink, which would like a piece of the action, is still years behind, having focused on different technology for its space-based internet service.