u/Foreign-Industry-841

Everyone is panicking over the brutal Q2 headlines because revenue missed by 37 percent with a 7.67 million dollar result versus the 12 million expected. The 131 million dollar net loss is definitely an ugly look, and Wall Street is entirely focused on the near term cash burn right now. However, if you look past the balance sheet, Recursion quietly dropped some massive proof of concept data that directly validates their entire AI platform.
They officially advanced their first previously unexplored neuroscience target into a joint early discovery program with Genentech. While the exact gene and disease pathway are hidden behind confidentiality agreements, the sheer scale of how they found it is pure sci fi. Their team mass produced over 1 trillion fragile human brain cells, systematically knocked out 17000 plus genes using CRISPR, took 30 million microscopic images of the cellular changes, and let an AI foundation model map out the results to flag a brand new therapeutic target.
The biggest bear case against TechBio has always been that AI drug discovery is theoretical and won't find novel biology that big pharma actually values. Moving this target triggers a milestone progress report and proves that their massive 12 billion dollar partnership with Roche and Genentech is actively delivering. The financials will always be lumpy while waiting for milestone payments, but the core thesis of their industrialized pipeline just scored a massive practical win.

Are you buying this dip, or holding off until the cash burn settles?

FYI not financial advice

Hey everyone, just wanted to flag some massive unusual options activity that hit Recursion Pharmaceuticals ($RXRX) at the end of the week.
The stock closed Friday up 4% at $3.59, but the options chain went absolutely parabolic.

📊 The Numbers:
Call Volume: Traders slammed 50,051 call options in a single session. That is a 298% spike over the average daily volume of ~12.5k contracts.
Put/Call Ratio: The daily volume Put/Call ratio dropped to an ultra-low 0.12, and the overall Open Interest ratio sits at 0.23. Options traders are almost exclusively buying calls right now.
Implied Volatility (IV): Sitting at a massive 83.61%. Market makers are pricing in a violent move up or down, making contract premiums pretty expensive.
Long-Term Bets: Total call open interest is now at 275,217 contracts. Interestingly, big institutional block buyers were seen stacking the January 2028 LEAPs, adding over 1,000 contracts to that chain in a single day.

🧬 What’s Driving This?
RXRX just dropped Q1 earnings. Revenue was soft at $6.47M, but they beat bottom-line expectations by posting a smaller loss of $0.22 per share. The speculative crowd seems to be looking past the revenue miss and loading up on the AI-driven drug discovery pipeline, or positioning for potential catalysts coming in June.
With IV this high, buying straight calls is pricey, but the raw volume shows someone (or a lot of people) expects a big breakout soon.
Are any of you holding RXRX shares or playing this options spike?

Disclaimer: Not financial advice. Just tracking the data.

Been looking at RXRX again and I think it’s one of the cleaner “AI application” plays if money starts rotating out of pure AI hardware / semis and into companies actually using AI in a vertical with proprietary data.

Not trying to make this sound like some guaranteed squeeze. It’s still biotech, it burns cash, and clinical readouts can wreck you. But the setup is pretty asymmetric imo.

Why I’m watching it:

RXRX is basically an AI drug discovery / TechBio company. The simple thesis is that everyone has been chasing AI hardware for the last 18 months. NVDA, semis, power, data centers, etc. At some point the market starts asking: “okay, who actually uses all this compute to create something valuable?”

Bio is one of the more obvious answers. Drug discovery is expensive, slow, and failure-prone. If AI actually helps map biology, identify targets, design molecules, or speed up trial decisions, the upside is massive. That doesn’t mean RXRX wins automatically, but it does mean the narrative is very easy for the market to understand if the tape starts rewarding AI applications.

Squeeze angle:

This is where it gets interesting.

Latest short interest I saw was around 184M shares short, roughly 38% of float, with days to cover around 13+. That is not a tiny short base. That is a lot of people leaning the same direction.

On top of that, call activity picked up recently. MarketBeat flagged a day where around 50k calls traded, close to 300% above normal call volume. Call OI is also meaningful, though I wouldn’t overstate it as some automatic gamma squeeze. It’s more like: the ingredients are there if volume shows up.

So the setup is basically:

• heavily shorted stock
• low-ish share price, easy for retail to understand
• AI + biotech narrative
• upcoming pipeline / regulatory catalysts
• recent call buying
• still far below prior highs

That’s enough for me to at least have it on watch.

Catalysts / actual business stuff:

The company has multiple shots on goal. The ones I’m watching:

REC-4881: potential regulatory update expected in 2H26. They already showed Phase 2 proof-of-concept data in FAP, including meaningful polyp burden reduction. Any clarity on registrational path could matter.

REC-1245: additional Phase 1 dose escalation data expected in 2H26. Early safety/PK looked clean enough so far, and it’s one of the programs tied directly to the platform story.

REC-7735 / REC-102: data-driven go/no-go decision on Phase 1 initiation expected in 2H26.

Partnered programs: Sanofi/Roche/Genentech stuff is important because the market needs validation that this isn’t just “AI biotech vibes.” If partnered milestones keep coming, the story gets more credible.

They also said they have runway into early 2028 without additional financing, which matters because the obvious bear case on small/mid biotech is always dilution.

Bear case, because this isn’t free money:

• Revenue is tiny and lumpy because a lot of it is collaboration/milestone based.
• They are still losing a lot of money.
• Biotech catalysts are binary.
• Short interest can stay high for a long time.
• “AI drug discovery” has been hyped before and the market may demand real clinical proof, not just platform language.
• Insiders have sold some shares, which bears will point to.

So yeah, this is not “all in and pray.” But I do think RXRX has one of the better setups for a squeeze-style move if the AI trade broadens from hardware into application-layer names.

For me, the trade is less “this is definitely squeezing tomorrow” and more:

If AI bio catches a bid + RXRX gets positive catalyst momentum + call volume keeps building, shorts are crowded enough that this can move stupid fast.

Watching volume, call flow, and whether it can start reclaiming key moving averages / recent highs. If it starts doing that while the AI app narrative is hot, I don’t think shorts are going to be comfortable here.

Position: Jan 27 3.5c

Not financial advice. It’s biotech, don’t be dumb with size.

Morgan Stanley raised the firm’s on Recursion Pharmaceuticals () to $5.50 from $5 and keeps an Equal Weight rating on the shares.
🚀🚀🚀