Rezolve AI PLC: Contrarian Short Interest vs. Bullish Fundamentals – A Tipping Point for Market Support?

The stock of Rezolve AI PLC (NASDAQ: RZLV) has become a focal point for investors weighing contrarian short interest trends against a backdrop of robust fundamental momentum. As the company navigates a surge in bearish bets, its projected revenue growth, institutional backing, and enterprise client expansion suggest a compelling case for long-term resilience. This analysis examines the interplay between these forces to assess whether RZLV is gaining or losing market support in the short to medium term.

Rising Short Interest: A Contrarian Signal or Overreaction?

Short interest in RZLV spiked by 45.6% in December 2025, reaching 20.15 million shares-30.93% of the float-according to data from Fintel and MarketBeat. This equates to a days-to-cover ratio of 1.6, meaning it would take just 1.6 days of average trading volume (12.79 million shares) to liquidate all short positions. Such a high level of shorting typically signals bearish sentiment, often driven by concerns over valuation, earnings risks, or macroeconomic headwinds. However, in RZLV's case, the short interest surge appears to contradict the company's operational trajectory.

The off-exchange short volume on December 29, 2025, further underscored bearish activity, with 6.19 million shares shorted-50.58% of total off-exchange trading volume. While this suggests aggressive shorting, it also raises the risk of a short squeeze if the stock rallies, potentially amplifying volatility.

Bullish Fundamentals: ARR Growth, Institutional Confidence, and Revenue Milestones

Rezolve AI's fundamentals tell a different story. The company's Annual Recurring Revenue (ARR) is projected to exceed $200 million by year-end 2025, far surpassing its initial $100 million target and a revised $150 million guidance. December 2025 alone is expected to generate over $17 million in revenue, reflecting strong seasonal demand and enterprise adoption. With a client base of 650+ enterprise customers-including global brands like Adidas, Burberry, and Target-Rezolve AI's platform is scaling across industries, positioning it for sustained growth.

Institutional investors have also signaled confidence. A $200 million private placement in May 2025, described as "significantly oversubscribed," brought in major names like Citadel, BlackRock, and Vanguard. Additionally, in October 2025, 10.6 million shares were transferred to a new global institutional investor, further solidifying long-term support. As of December 2025, institutional ownership stood at 27.96% of RZLV's stock, with 137 institutional shareholders collectively purchasing 33.54 million shares over 24 months according to MarketBeat data.

Contrarian Dynamics: Short Squeeze Potential vs. Structural Strength

The juxtaposition of rising short interest and bullish fundamentals creates a classic contrarian scenario. High short interest often precedes sharp price corrections, but Rezolve AI's financials and institutional backing suggest the company is structurally positioned to withstand near-term volatility. For instance, while GAAP net losses are anticipated due to non-cash expenses, adjusted EBITDA is expected to turn positive, highlighting strong operating leverage.

Moreover, the company's guidance to reach $500 million in ARR by 2026-implying $40 million in monthly recurring revenue-underscores its scalability. This trajectory could trigger a short squeeze if the stock continues to outperform expectations, particularly as short sellers face margin calls during upward price swings.

Conclusion: A Tipping Point for Market Support

Rezolve AI PLC's stock is at a critical juncture. While short interest remains elevated, the company's fundamentals-driven by ARR growth, institutional investment, and enterprise adoption-suggest that bearish sentiment may be overcorrecting. The risk of a short squeeze adds a layer of volatility, but it also presents an opportunity for investors who believe in the company's long-term potential.

For contrarian investors, RZLV represents a high-conviction trade where short-term bearishness could be eclipsed by structural growth. However, caution is warranted, as macroeconomic shifts or earnings misses could validate short sellers' concerns. The coming months will be pivotal in determining whether Rezolve AI's fundamentals solidify market support or if short-term volatility proves insurmountable.