SoundHound AI enters the back half of July with the same structural tension that has defined the stock for weeks — a massive short position that refuses to budge, a borrow market with zero slack, and an earnings date now just three weeks away.
The price has slipped back since last week's note. SOUN closed at $6.69 on July 14, down from the $6.96 print on July 6. That gives back most of the 8.75% weekly gain celebrated in the prior article, though the stock is still up fractionally on the week and 3.1% on Monday alone. The short book offered no comfort to sellers hoping for relief. Short interest climbed to 42.3% of the free float — up from 41.9% a week ago and roughly 12% higher than 30 days prior. Shorts are not only not covering, they are modestly adding.
The borrow market remains completely locked. Availability has been 0% every session across the entire data window — not a single day of relief since early June. Every share in the lending pool is committed. Cost to borrow eased to 11.9% from a mid-week peak near 15.6%, but the absolute level remains firmly in "high" territory and the lending pool itself has not opened up. The ORTEX short score holds at 80.9, in the first percentile for short positioning among all ranked names. Days to cover, from the latest FINRA fortnightly reading, stands at 6.5 — meaning any forced unwind would be a multi-session event even under favourable volume conditions. The options market offers a different read: the put/call ratio is 0.36, well below both its 20-day average of 0.38 and its 52-week high of 0.67. Call volume continues to dominate. That split — heavy short positioning in stock borrow, aggressive call buying in derivatives — is the defining feature of the SOUN setup right now.
The Street remains constructive in rating, cautious in target. All six analyst ratings on record carry Buy or Outperform labels, with a consensus mean target of $13.14 — nearly double the current price. But the direction of travel on targets has been consistently downward. Northland cut to $12 in May after the last earnings print. HC Wainwright moved from $26 to $20 in March. Piper Sandler, the one holdout at Neutral, trimmed repeatedly and now sits at $9. Bulls point to a debt-free balance sheet, 80% revenue growth, and a voice commerce business with multiple monetisation levers. Bears argue the stock still trades at roughly 30x 2026 revenue, leaving no margin for error in a competitive AI market. The factor score picture reinforces that tension: EPS momentum over 90 days ranks in the 99th percentile, EPS surprise in the 86th — growth signals are genuinely strong. But the short score ranks in the bottom 1% of the universe, and days-to-cover ranks in the 8th percentile. The market is paying for growth while simultaneously running one of the largest short books in the small-cap universe against it.
Insider activity is worth noting as a directional signal, even if the magnitudes are modest. The CEO, COO, CFO, CTO, and both co-founders all sold on June 15, collectively realising around $2 million at $7.46 per share. The CEO ran a similar sale in March at $6.79. These are not panic sales — the stock has since drifted below those levels — but a cluster of C-suite selling across every major officer role is not a vote of confidence at current prices. Net insider activity over the past 90 days is marginally positive in share terms due to the accounting, but the cash flow is outward.
The next earnings date is August 6. The two most recent prints produced first-day declines of 2.3% and 5.2%, with the May 7 result extending to a five-day loss of 9.1%. With short interest at 42% of the float, the borrow market at capacity, and a call-heavy options skew in place, the August print sets up as the key moment where these competing forces — locked-in shorts, call-positioned bulls, and a Street still publishing double-the-price targets — will have to reconcile against actual numbers.
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