Nearly 45% of Its Float Is Being Sold Short. Should You Bet on iRobot Stock Here?

Meme stock enthusiasts continue to flock into iRobot (IRBT) following reports the U.S. government is “all in” on accelerating the domestic robotics industry. 

On Wednesday, the Nasdaq-listed firm blew past key resistance at the $4.82 level. IRBT currently has nearly 45% of its float sold short, making it a perfect candidate for a short squeeze. 

At the time of writing, iRobot stock is trading at roughly 3.5x its price on Nov. 20. 

Here’s Why Chasing the iRobot Stock Price Rally Is Risky

While the allure of quick gains can be tempting, chasing meme stock rallies like iRobot’s is often tied to significant risks. 

Elevated short interest may fuel sharp squeezes, but these moves, in most cases, are detached from fundamentals and can reverse just as quickly. 

Retail enthusiasm tends to amplify volatility, leaving late entrants exposed to material losses once momentum fades. Thin liquidity and speculative trading can distort valuations, creating disconnect between price and financial reality. 

Without sustainable earnings growth or clear strategic catalysts, therefore, the ongoing IRBT share price rally may be more sentiment than substance, making it a dangerous trap for investors seeking lasting returns. 

IRBT Shares’ Momentum May Be Approaching Exhaustion

iRobot shares remain a no-go for 2026 since neither fundamentals nor technicals currently warrant investing in the consumer robot specialist. 

In November, the Bredford-headquartered firm recorded about a 25% year-over-year decline in its Q3 revenue on a 120-basis-points contraction in gross margin, indicating weakening demand and mounting cost pressure. 

Meanwhile, IRBT’s relative strength index (14-day) is hovering around 70 currently, reinforcing that the bullish momentum is headed for exhaustion. 

Finally, even after a cosmic rally, iRobot remains a penny stock only. So, it’s vulnerable to extreme volatility, speculative swings, and sharp reversals that can quickly erase gains. 

iRobot Lacks Broad-Based Wall Street Coverage

What’s also worth mentioning is that IRBT shares currently receive coverage from only one Wall Street analyst. 

This means institutional visibility is extremely limited, leaving investors with scarce professional guidance and amplifying the risk of sentiment-driven volatility in iRobot stock. 

On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.