Been looking at RXRX again and I think it’s one of the cleaner “AI application” plays if money starts rotating out of pure AI hardware / semis and into companies actually using AI in a vertical with proprietary data.
Not trying to make this sound like some guaranteed squeeze. It’s still biotech, it burns cash, and clinical readouts can wreck you. But the setup is pretty asymmetric imo.
**Why I’m watching it:**
RXRX is basically an AI drug discovery / TechBio company. The simple thesis is that everyone has been chasing AI hardware for the last 18 months. NVDA, semis, power, data centers, etc. At some point the market starts asking: “okay, who actually uses all this compute to create something valuable?”
Bio is one of the more obvious answers. Drug discovery is expensive, slow, and failure-prone. If AI actually helps map biology, identify targets, design molecules, or speed up trial decisions, the upside is massive. That doesn’t mean RXRX wins automatically, but it does mean the narrative is very easy for the market to understand if the tape starts rewarding AI applications.
**Squeeze angle:**
This is where it gets interesting.
Latest short interest I saw was around 184M shares short, roughly 38% of float, with days to cover around 13+. That is not a tiny short base. That is a lot of people leaning the same direction.
On top of that, call activity picked up recently. MarketBeat flagged a day where around 50k calls traded, close to 300% above normal call volume. Call OI is also meaningful, though I wouldn’t overstate it as some automatic gamma squeeze. It’s more like: the ingredients are there if volume shows up.
So the setup is basically:
* heavily shorted stock
* low-ish share price, easy for retail to understand
* AI + biotech narrative
* upcoming pipeline / regulatory catalysts
* recent call buying
* still far below prior highs
That’s enough for me to at least have it on watch.
**Catalysts / actual business stuff:**
The company has multiple shots on goal. The ones I’m watching:
REC-4881: potential regulatory update expected in 2H26. They already showed Phase 2 proof-of-concept data in FAP, including meaningful polyp burden reduction. Any clarity on registrational path could matter.
REC-1245: additional Phase 1 dose escalation data expected in 2H26. Early safety/PK looked clean enough so far, and it’s one of the programs tied directly to the platform story.
REC-7735 / REC-102: data-driven go/no-go decision on Phase 1 initiation expected in 2H26.
Partnered programs: Sanofi/Roche/Genentech stuff is important because the market needs validation that this isn’t just “AI biotech vibes.” If partnered milestones keep coming, the story gets more credible.
They also said they have runway into early 2028 without additional financing, which matters because the obvious bear case on small/mid biotech is always dilution.
**Bear case, because this isn’t free money:**
* Revenue is tiny and lumpy because a lot of it is collaboration/milestone based.
* They are still losing a lot of money.
* Biotech catalysts are binary.
* Short interest can stay high for a long time.
* “AI drug discovery” has been hyped before and the market may demand real clinical proof, not just platform language.
* Insiders have sold some shares, which bears will point to.
So yeah, this is not “all in and pray.” But I do think RXRX has one of the better setups for a squeeze-style move if the AI trade broadens from hardware into application-layer names.
For me, the trade is less “this is definitely squeezing tomorrow” and more:
**If AI bio catches a bid + RXRX gets positive catalyst momentum + call volume keeps building, shorts are crowded enough that this can move stupid fast.**
Watching volume, call flow, and whether it can start reclaiming key moving averages / recent highs. If it starts doing that while the AI app narrative is hot, I don’t think shorts are going to be comfortable here.
Position: Jan 27 3.5c
Not financial advice. It’s biotech, don’t be dumb with size.