SoundHound AI reverses last week's brief reprieve — short interest jumped back above 41% of the free float while the stock shed nearly 13% on the week, unwinding the modest recovery that had briefly trimmed bearish positioning.
The reversal in short interest is the sharpest development this week. Positions climbed from around 38.1% a week ago to 41.8% of the free float by June 25 — adding roughly 10 million shares net over four sessions, most of that arriving in a single day on June 24 when shorts added over 10 million shares. That erases the covering seen last week and pushes the position back toward its recent highs. The ORTEX short score held steady just above 80, a level it has maintained for two weeks, ranking the stock in the 2nd percentile on short positioning intensity across the broader universe. Days to cover from the most recent FINRA fortnightly stands at 5.9 — meaning at average daily volume it would take shorts nearly six trading days to unwind. The borrow market remains sealed: availability has been at 0% without interruption throughout June, with every share in the lending pool already committed. Cost to borrow has crept back up to 11.8% after falling sharply from a May peak above 26% — still elevated but well off those extremes, suggesting the incremental supply of new shorts is absorbing whatever freed-up borrow capacity exists at these lower rates.
The one notable divergence this week is in options. Despite bears pressing short positions hard, the put/call ratio has actually dropped to 0.37 — more than 1.6 standard deviations below its 20-day average of 0.42, and approaching the 52-week low of 0.31. Options traders are not hedging into the slide; if anything, the call-heavy skew suggests some participants are positioning for a bounce. Peers are broadly weaker: REKR fell 13.5% on the week and PONY dropped 12.7% — both closely correlated names tracking a sector-wide AI software selloff. FIVN and AUR, by contrast, closed the week in positive territory, signalling the weakness is not entirely uniform across the peer group.
The bull-bear debate on SOUN remains structurally familiar. Bulls point to a clean balance sheet, no debt, 90-day EPS estimate revisions in the 99th percentile, and 12-month forward EPS growth expectations ranking in the 98th percentile — suggesting the analyst community sees meaningful improvement ahead despite current losses. The bear case is harder to dismiss at a stock price of $6.21 when the consensus mean target is $14.25: that gap implies substantial upside if you trust the Street, but most of those targets were set when the stock traded materially higher. The most recent analyst move, from Northland Capital Markets in early May, cut the target from $14 to $12 while holding an Outperform rating — a pattern of bulls trimming expectations without abandoning conviction. The stock's own factor scores underline the tension: EPS surprise ranks in the 85th percentile and forward estimate momentum is strong, but the short-score rank sits at the 2nd percentile and quality metrics are deeply negative.
Insider activity adds one more layer to watch. Five executives — including CEO Keyvan Mohajer and co-founder Seyed Emami — sold shares on June 15 at $7.46, with the CEO's sale alone totalling roughly $944,000. The 90-day net insider position is a small net positive at roughly 576,000 shares, but the pattern of coordinated selling near a price level now 16% above the current quote will invite scrutiny as the stock drifts lower.
Q1 results on August 6 are the next defined catalyst. The two most recent earnings reactions were negative on the day — down 5.2% and 2.3% respectively — though the May 22 print recovered to a positive 8.2% over the following five sessions. With short interest at 41.8% and borrow availability at zero, the setup into that print is among the most charged the stock has carried in months.
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