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Good afternoon: |
If you've been watching Market Masters this week, you've heard the same ticker come up again and again. RXRX. |
The stock is moving. It jumped about 8% yesterday. Up more than 20% over the past week. Traders are talking about it because it's in the middle of a squeeze. |
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Here's the setup. About 31% of the shares are sold short. That's 132 million shares that need to be bought back. Based on daily average volume, it would take just over three days for shorts to unwind their positions, according to Fintel. |
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A couple weeks ago, that number was closer to seven days. Since then, the stock has already gained over 20%. That is how squeezes work. The longer traders hold, the more painful it gets. Sooner or later, they have to take their medicine, and the price goes higher. |
That explains the move. But it doesn't explain the whole story. |
The more interesting question isn't whether RXRX is breaking out. It's why. |
Because you would think this was just another biotech stock. A small cap name that trades with healthcare, or closely with the leveraged biotech ETF - LABU. |
And yes, the sector has had a decent week after capital rotated back into large drugmakers on the heels of a Trump/Pfizer deal. But that did not lift smaller names like this one. |
Why RXRX moves differently |
That's the part almost nobody understands. |
Most traders see "pharmaceutical" and stop there. They lump RXRX in with every other small biotech chasing a drug approval. They assume it trades on clinical trial headlines, FDA calendars, or the same momentum that moves healthcare ETFs. |
That's the mistake. RXRX doesn't act like a biotech. It moves with AI flows. |
Here's why. |
This company runs one of the most powerful supercomputers in the pharmaceutical industry. Built on NVIDIA hardware. Running massive AI models that search across billions of cell images and chemical structures. |
That makes RXRX less of a lottery ticket... and more of a platform. It isn't betting everything on one or two drug trials. It's building an engine that can spin up a pipeline. |
And in 2023, NVIDIA validated that vision. It wrote a $50 million check. Opened the door to its BioNeMo cloud. RXRX's Phenom-Beta model became the first third-party hosted on that system. To run it, RXRX built BioHive-2, a supercomputer powered by more than 500 NVIDIA H100 GPUs. At launch, it ranked among the top 50 fastest computers in the world. |
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That's not biotech. That's industrial AI. |
And it's why RXRX moves differently. When capital flows into NVIDIA, when AI headlines hit the tape, RXRX tends to move with it. Which brings us back to the squeeze. Shorts weren't betting against "an AI company." They were betting against "just another biotech." That's the mistake. |
The NVIDIA tether |
Pull up a chart and overlay RXRX with NVIDIA. You'll see it immediately. |
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When NVIDIA chopped sideways through late summer, RXRX broke down. From the mid $6s to the mid $4s, it bled lower as momentum in the broader AI trade stalled. |
But when NVIDIA caught a bid in September, RXRX turned on a dime. The stock ripped more than 20% in a week, and suddenly those heavily short positions are underwater. That's how you end up in a squeeze. |
Most traders never expect this kind of correlation. They think of RXRX as a biotech name, and they short it like a biotech name. But the market is telling a different story. |
This is a stock moving in rhythm with the leader of the AI boom. |
Why? Because RXRX is tethered to NVIDIA in ways that few other companies can claim. NVIDIA isn't just a vendor. It's an investor, a partner, and the provider of the compute backbone that RXRX runs on. |
When NVIDIA surges, it validates the whole AI ecosystem. It creates capital inflows across the companies in its orbit. And RXRX, sitting right inside that orbit with one of the world's fastest NVIDIA-powered supercomputers, becomes a direct beneficiary. |
And that's why this squeeze matters. It's not just shorts taking pain. It's traders waking up to the fact that RXRX isn't trading on FDA calendars. It's trading on NVIDIA's momentum. |
And that realization is what can push a $5 stock into the spotlight as one of the next darlings of the AI race. |
The bigger picture… (why it matters for us) |
This is the kind of setup we track every day. |
The AI boom isn't about one stock. NVIDIA may sit at the center, but value radiates outward into companies most traders have never heard of. By the time the crowd catches on, the move is already in motion. |
You don't need to chase NVIDIA at $187. The smarter trade is spotting the tethered names. RXRX is one. And there are countless others lining up behind it. |
The trick is knowing where to look. Yesterday, we talked about Buffett's $9.7 billion OxyChem deal and how it ties into the AI buildout. Today, it's RXRX in a squeeze. Tomorrow it will be something else. The point is simple: the only way to keep pace is to know how all the pieces connect. |
That's exactly what our NVIDIA 4D system is built to do. We follow liquidity. We track correlations. We get in front of the flow. |
If you have been on the sidelines watching this market run, you know what it feels like. Every week there is another headline, another breakout, another name that doubles while you are still trying to figure out what it even does. That is how wealth gets transferred. From the slow hands to the fast ones. |
This is not the time to be slow. |
AI is already the most powerful money-making trend of our lifetimes. Bigger than dot com. Bigger than housing. Bigger than crypto. And it is still only in the early innings. You have seen the first leg. You have seen fortunes already made. The next leg is coming, and it will be faster and bigger than the first. |
Do not miss it. |
Join me live next week at 2:30 PM ET for the NVIDIA 4D Masterclass. |
This is the starting line. We will lay out the full system, show you exactly how to trade these setups, and give you the tools to win the moment. |
Reserve your seat here... |
Because this is the moment. The bubble of all bubbles. The opportunity people will look back on a decade from now and ask why they didn't act. |
Don't be on the outside looking in. |
Stay positive, |
Garrett Baldwin |
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Wall Street's quietly re-pricing a whole group of AI infrastructure names.
6x multiples going to 20x — and it's not on CNBC.
Click here to see the names in play before its too late… |
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