The massive short squeeze rally in GameStop (NYSE:GME) and several other meme stocks in 2021 will go down in the books of financial history. While the speculative euphoria has calmed, short squeeze stocks continue to grab the attention of investors.

Furthermore, selected high short interest stocks continue to surprise with a 100% or 200% rally at the blink of an eye.

I believe that risk-taking investors can consider allocating a small part of the portfolio to benefit from short squeeze rally. Of course, restrict the focus of your short squeeze investing to companies with average or higher fundamentals.

In the current macroeconomic environment, I would avoid purely speculative short interest stocks.

This column will discuss three short squeeze stocks that can rally by 100% within the next two to three quarters.

It might be just a matter of days for these stocks to double. However, investors need to sit though the period of calm before the stock skyrockets.

Let’s discuss the reasons to be bullish on these short squeeze stocks.

Marathon Digital (MARA)

With Bitcoin (BTC-USD) trending higher, Marathon Digital (NASDAQ:MARA) stock has surged by 160% for year-to-date 2023. However, the short interest in the stock remains high at 26%.

One reason to investors betting against MARA stock is the fact that deployment of miners has been sluggish. The company reported mining capacity of 11.5EH/s as of March. It seems unlikely that Marathon will achieve the target of capacity expansion to 23EH/s by the end of Q2.

However, I expect MARA stock to deliver a strong short squeeze rally based on two factors. First, it’s likely that Bitcoin will remain in an uptrend. Even if delayed, the mining capacity expansion positions Marathon for robust growth in 2023 and 2024.

When they announce Q1 results, MARA stock is likely to surge as I expect a meaningful improvement in EBITDA margin. The value of digital assets in the balance sheet will swell. MARA stock is therefore attractive for short squeeze investing for the next few quarters.

ChargePoint Holdings (CHPT)

ChargePoint Holdings (NYSE:CHPT) stock has a short interest of almost 20%. It’s interesting to note that the EV charging infrastructure provider has been sideways in the first four months of the year.

A breakout on the upside seems imminent from oversold levels.

Recently, the Biden-Harris administration proposed the “strongest ever” pollution standards for cars and trucks. It’s expected that this move will help in accelerating the push towards EVs.

ChargePoint seems positioned to benefit from significant penetration needed in EV charging infrastructure.

It’s worth noting that ChargePoint has continued to report robust revenue growth. However, the stock has remained depressed in-line with broader industry sentiments.

For 2022, the company reported 94% year-on-year revenue growth to $468 million. The annualized subscription revenue has crossed $100 million.

As the company expands, recurring revenue will swell and boost EBITDA margin. I expect revenue growth to remain robust since ChargePoint has leading market presence in the U.S. and is aggressively expanding in Europe.

Lucid Group (LCID)

Lucid Group (NASDAQ:LCID) stock has corrected by 64% in the last 12 months. The downside is justified, with Lucid reporting weak production and sales numbers through 2022. However, the selling seems to be overdone and with a short interest of over 20%, LCID stock is poised for a short squeeze rally.

For Q1 2023, Lucid produced and delivered 2,314 and 1,406 vehicles respectively. At mid-range of the guidance, the company is likely to deliver 12,000 vehicles during the year.

It’s also worth noting that the company expects Lucid Air Sapphire production in 2023. Lucid Gravity SUV production will commence in 2024. With the company has sufficient liquidity at least through Q1 2024, the stock seems poised for a sharp rally on the back of production growth.

From a long-term perspective, Lucid is building base for global presence. The company’s first model is being sold in the U.S. and multiple European countries through online booking. Further, Lucid has an agreement with the Saudi government to deliver 100,000 EVs through 2030. Possible expansion in China in the next 12 to 24 months will be another upside catalyst.

On the date of publication, Faisal Humayun did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.