If you remember Hyliion $HYLN from a few years ago, you probably remember them as just another overhyped electric vehicle story that fell apart. They were trying to build hybrid powertrains for big semi trucks, but the supply chain issues crushed that market. Management then pivoted and completely changed course before burning through all their money. The CEO killed the trucking business and went all in on a unique technology they had acquired from GE called the KARNO power module.
Fast forward to right now, and Hyliion has quietly turned into a legitimate high growth company with actual revenue streams coming in over the next 2 years. They are focusing heavily on distributed energy, which is perfect timing because we keep hearing about how the current utility grid is breaking and struggling to support the massive power demands of new AI data centers.
The stock has responded in a major way, currently trading at $3.69 per share. To put its recent momentum into perspective, that price represents an incredible 103% growth year to date, 94% growth in the last month, and 49% growth this week alone.
The KARNO reactor is basically a fuel agnostic generator that doesn't use a flame to burn fuel, meaning it operates with crazy high efficiency. What makes it a huge opportunity for data centers is its extreme flexibility with fuel sources. During their recent earnings call, they showed the system switching dynamically between natural gas, hydrogen, and propane while it was running without shutting down. Data centers can run on cheap pipeline natural gas and switch instantly to backup fuel if there is a grid disruption.
The entire system is manufactured using state of the art metal 3D printing, a process they took over directly from General Electric. Using additive manufacturing makes the generator incredibly cost effective to build because it eliminates traditional assembly bottlenecks and material waste. This efficient production setup is exactly why management expects to hit breakeven gross margins by late 2026 as volumes scale.
The numbers are starting to back this up too. They just beat their first quarter revenue expectations by a mile, bringing in over $2.83 million when analysts only expected a little over $1.15 million. They also have a very real partnership with the US Navy. They already finished initial testing with them and are building an 800 kilowatt system for an unmanned Navy vessel right now, with a lot more military contract funding expected later this year.
On top of that, they signed a massive letter of intent with a developer called VFG Holdings for up to 250 reactor cores to power data centers. This partnership heavily validates Hyliion's technology because VFG is a highly credible, specialized AI infrastructure integrator led by top tier industry veterans. Their leadership includes a former Chief Technology and AI Officer from Dell Technologies, which shows that institutional tech experts are actively choosing Hyliion's 800 volt architecture to power their next generation computing clusters.
https://investors.hyliion.com/news/news-details/2026/Hyliion-Holdings-Reports-First-Quarter-2026-Financial-Results-2026-eBZIJbmqVw/default.aspx
That single deal brings Hyliion's total pipeline of non binding letters of intent to 750 cores, which represents over $400 million in potential revenue.
What’s interesting is they have zero immediate dilution risk because they are sitting on over $139.3 million in cash, meaning they have a multi year runway to scale production without hurting shareholders.
This is where the technical setup gets crazy. Even though the stock recently had a massive explosion in trading volume and surged past $3.50, short sellers are heavily doubling down. Short interest is back up to around 11% of the float, which is the highest it has been in almost 3 years.
Because the daily trading volume is usually relatively low, the days to cover metric is sitting between 14 and 18 days. That means it would take short sellers almost 3 to 4 weeks of total volume just to buy back their shares and exit their positions if they get trapped. There is also a massive wall of call options sitting at the $4.00 mark. If buyers push the price past $4.00, market makers will have to buy up shares to cover themselves, which could easily trigger a massive compounding short squeeze.
This is a well capitalized utility play backed by the military and targeting the data center boom. With wall street price targets sitting around $5.00 and the shorts trapped by a high days to cover bottleneck, there is a ton of room for this stock to continue to run.