SoundHound AI ends June in a state of maximum tension — the most heavily shorted it has been in months, a borrow market that has been completely sealed for weeks, and options traders who keep fading the bears.
The short position is deep and still growing. Short interest reached 42.1% of the free float by June 30, up 7.7% on the week and roughly 12 percentage points above where it stood at the start of June. The ORTEX short score pushed to 81.2 — a fresh high for this run — and the stock ranks in the 1st percentile on short-positioning intensity across the full ORTEX universe. At 5.9 days to cover from the latest FINRA fortnightly reading, unwinding this position is not a quick exercise. The borrow market tells the same story from another angle: availability has been zero without interruption for the entire month of June, meaning every share in the lending pool is already committed. Cost to borrow rose 21% on the week to 14.0%, recovering sharply from the mid-month trough near 10.5% and pointing back toward the May highs above 20%. That combination — record crowding, a frozen lending pool, and rising borrow costs — makes this one of the most constrained short setups across the application software universe.
Options traders are not reading the same playbook. The put/call ratio dropped to 0.36 by June 30, more than 1.6 standard deviations below its 20-day average of 0.41 and near the 52-week low of 0.31. That is the signature of a market leaning heavily toward calls rather than puts — the opposite of what the short book might lead you to expect. The divergence has been building steadily: the PCR was above 0.47 in mid-June and has drifted consistently lower since. Whether that reflects genuine conviction in a rebound or simply speculative positioning ahead of the August 6 earnings date is not clear from the data alone, but the contrast with the short side is sharp enough to name explicitly.
The Street is cautious but not uniformly negative. The analyst consensus sits at hold, with the most recent action — Northland Capital Markets cutting its target to $12 from $14 in early May — pointing to modest target compression since the February earnings print. DA Davidson has maintained its Buy rating and a $14 target through the volatility. At $6.47, the mean target implies roughly 120% upside on paper, though the gap between price and target is wide enough to reflect lingering uncertainty about execution rather than a clear buy signal. The bull case rests on diversified revenue streams, no debt, and potential margin expansion from recent acquisitions. The bear case is harder to dismiss at current short levels: valuation at approximately 30x forward revenue sits at the expensive end even among high-growth software peers, and the company's quality metrics — negative ROA, a low Piotroski score — leave little room for execution slippage. EPS momentum over the past 30 days ranks in the 13th percentile, though the 90-day reading is in the 99th, suggesting the near-term picture has softened relative to the earlier trend.
Insider activity from June 15 is consistent with routine plan-based selling rather than a signal of distress. The CEO, COO, and two co-founders all sold modest amounts at $7.46 — above the current price — and the net 90-day insider position is slightly positive at around 576,000 shares, largely reflecting earlier acquisition activity. BlackRock added just under one million shares through May, bringing its stake to 7.5% of shares outstanding, which is the largest institutional footprint on record. Goldman Sachs added 3.5 million shares in Q1, though that filing covers March 31 and will not be updated until the next 13F cycle.
With the next earnings event set for August 6, the structure heading into that print is one to watch closely: a frozen borrow market with rising costs, shorts sitting at record levels, and options traders positioned for a move higher.
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