On January 29, 2026, silver hit an all-time high of $121.60 per ounce, and then fell to $74 in a single day, a drop so large that it was called “the craziest week in the history of metals.” Even after that sharp sell-off, the March 2026 silver futures contract (SIH26) is still up more than 18% year-to-date (YTD), while the iShares Silver Trust (SLV) is up about 150% over the past 12 months.
The reasoning behind the move remains. The Silver Association predicts that the silver market will experience a supply shortage for the sixth consecutive year, with a total shortfall of nearly 820 million ounces. Meanwhile, Fresnillo (FNLPF), the world’s largest primary silver producer, recently lowered its 2026 production guidance to 42 to 46.5 million ounces from the previous range of 45 to 51 million ounces, indicating that supply will not soon follow.
This combination is helping to create a short squeeze in silver mining stocks. The highly publicized silver short squeeze has resulted in margin calls on naked short positions and forced buying into the silver futures market. The same pressure is beginning to appear on silver stocks. Short interest among silver miners has climbed to recent highs, with companies such as First Majestic Silver (AG) and Discovery Silver (DSVSF) seeing significant short covering. Meanwhile, Silvercorp Metals ( SVM ) still posted record financial results, even as bearish bets remained elevated.
With metal volatility remaining extreme and some miners holding tight positions, could these three silver stocks be the next targets of a meaningful short-covering rally? Let’s take a look.
First Majestic Silver is a major silver producer operating mines in Mexico and the United States. The company generates most of its revenue from producing and selling silver and a large amount of its by-product gold, and it uses exploration and acquisitions to extend mine lives and increase production when metal prices strengthen. AG has gained 306% over the past 52 weeks and is up 41% year to date.
AG stock also appears to be priced more towards growth than value. Its forward P/E ratio is 68.72 times, compared with the industry’s P/E ratio of 19.17 times, which means the market is paying a huge premium for expected earnings growth.
On the operational front, the latest update shows why bearish positions can get crowded and then painful. In the fourth quarter of 2025, First Majestic produced a record 4.2 million ounces of silver, up 77% year-over-year, including 1.5 million ounces from Los Gatos.
Silver equivalent production increased to 7.8 million ounces, up 37% year over year, and the company implemented an aggressive drilling program of 57,305 meters to continue delivering oil to its project pipeline. Management also increased its dividend framework to 2% of quarterly net income starting in 2026, signaling confidence in cash generation as production scales.
This growth momentum is supported by deals and drills. The Gatos Silver transaction increases the joint venture interest in the Los Gatos underground mine to 70%, while exploration and mine planning work continues at the Santo Niño and Navidad targets in Santa Elena. Meanwhile, First Majestic agreed to sell Del Toro assets to Sierra Madre for up to $60 million, a move that could strengthen the company’s focus and support balance sheet flexibility.
Wall Street’s view is positive but not aggressive about the numbers. Seven analysts have a consensus rating of “Moderate Buy,” with an average price target of $24.42, while the current price of $23.52 represents only a theoretical upside of about 4%.
Discovery Silver is a precious metals miner with a simple plan. It generates cash flow from its producing assets while also building a long-term growth pipeline through exploration, resource conversion and prudent capital expenditures.
The stock has gained 625% over the past 52 weeks and is up 32% year to date. A move like this could lead to a rapid liquidity-driven surge, especially if short interest is high.
On the operational front, Discovery’s Q4 2025 update showed strong results from its Timmins platform. The company produced 66,718 ounces of gold, injected 67,010 ounces and sold 64,479 ounces at an average realized price of $4,157 per ounce, with “outstanding” exploration results from its operations and drilling in the Owl Creek area.
The balance sheet is also important from a short squeeze perspective. The company had approximately $410 million in cash at the end of 2025 and had established a $250 million revolving credit facility, which includes a $100 million accordion feature, which gives the company financing flexibility and alleviates the financing pressures that short sellers often point to.
The big shift behind the market re-rating was the acquisition of Newmont’s Porcupine Complex on April 15, 2025. The deal establishes Discovery as a Canadian gold producer with multiple operations in and around Timmins, Ontario, one of the world’s most prominent gold mining camps, and also acquires a dominant land position with meaningful residual resources and exploration advantages.
Then in October 2025, Discovery signed a resource development agreement with the Taykwa Tagamou Nation, creating an advisory and economic benefit framework that will help support operational continuity at a time when market sentiment is tense and short sellers are active.
Silvercorp Metals is a cash-generating silver producer that generates the majority of its revenue from silver and receives meaningful by-product credits from lead and zinc. This combination helps control costs when metal prices fluctuate.
The momentum has been strong. SVM has gained 222% over the past 52 weeks and is up 34% year to date.
In terms of valuation, Silvercorp is trading at a forward P/E ratio of 20.82x compared to the industry’s P/E ratio of 19.17x, suggesting the stock is only slightly more expensive than its peers based on forward earnings.
The latest quarter supported this move. In the third quarter of fiscal 2026, revenue rose to a record $126.1 million, a year-on-year increase of 51%. After deducting smelter expenses, the realized silver price was $49.0/ounce, and silver accounted for 72% of revenue. Cash costs, excluding by-product credits, were negative $3.02/oz and AISC was $12.86/oz. Adjusted net income was $47.9 million, or $0.22 per share, and operating cash flow totaled $132.9 million, bringing cash plus short-term investments to $462.8 million, giving the company room to fund growth without rushing to dilute shareholder equity.
On the growth front, Silvercorp signed an agreement in January 2026 to acquire 70% of the Tulkubash/Kyzyltash gold project, which includes a phase 1 4t/year heap leach program targeting annual production of approximately 110,000 ounces of gold beginning in 2027-2028. It also boosts development of El Domo in Ecuador, with an updated budget of $284 million and first production expected on July 1, 2027. Improvements in metallurgical technology increased model copper recovery by 5.4% and gold recovery by 6.2%.
Analysts remain optimistic, with six analysts calling for a Moderate Buy consensus, with the $14.26 average target implying ~27% upside from $11.23.
At this point, a silver miner squeeze setup looks very real, but it is still a trade and not a sure thing. If silver holds above recent lows and futures positions continue to force short covering, then AG, DSVSF, and SVM will all be biased to the upside rather than the downside in the coming period, while higher beta stocks could overshoot on good news. However, if the metal breaks down again or liquidity dries up, these same charts could collapse quickly. In other words, the path is full of noise, but the balance of probabilities still favors higher prices rather than lower prices.
On the date of publication, Ebube Jones did not hold (either directly or indirectly) any securities mentioned in this article. All information and data in this article are for reference only. This article was originally published on Barchart.com