AXT, Inc. registered a 14% single-day gain on July 14, yet the week as a whole closed essentially flat — a volatile holding pattern that captures the fundamental tension heading into July 30 earnings: a heavy short book that won't budge, and options traders who remain stubbornly bullish despite the bears.
Short positioning is unchanged in direction if not in magnitude. Bears control 25.2% of the free float — confirmed across both the ORTEX daily estimate and the FINRA fortnightly reading of 11.26 million shares settled June 30. That 45% weekly build noted in Tuesday's note has not unwound. The ORTEX short score ticked up again to 55.3 on July 14, its highest recent reading, consistent with sustained rather than fading conviction on the short side. What has changed marginally is the pace: the daily increment on July 14 was a modest 3.5%, suggesting the sprint phase of this build may be slowing even as the absolute position remains elevated.
The borrow market continues to offer bears no friction. Availability is wide at 374% — three-and-a-half shares available for every one borrowed — and the 52-week trough in availability was 204%, meaning this pool has never been close to tight. Cost to borrow is 0.50%, up 21% on the week, but in absolute terms that is negligible. Bears are carrying a heavy position cheaply, with no mechanical squeeze pressure on either side of the trade. Options, however, tell a different story: the put/call ratio has dropped to 0.60, two full standard deviations below its 20-day average of 0.87. That is the most call-heavy configuration of the past year. Options traders appear to be positioning for a positive earnings catalyst on July 30, not a continuation of the month's 41% decline.
The Street's fundamental framing is split in a way that maps cleanly onto the positioning. Wedbush has an Outperform rating and raised its target to $93 in May after the company posted Q1 results that sent the stock up 35% in a single session and 52% across the following week — the most recent earnings history in the snapshot. B. Riley remains at Neutral with a $21 target, a stark divergence from Wedbush's bullishness and one worth noting given the stock now trades at $57.57. The bull case centres on record InP substrate backlog and expanding data-centre-driven capacity. The bear case flags operating cost inflation, raw materials headwinds, and lingering uncertainty around export permits for China. Valuation multiples reflect a stock priced for recovery: the PE has compressed sharply over 30 days, falling more than 157 points to 135x, while EV/EBITDA has dropped 20 points to 100x — still elevated, but moving in bulls' direction. EPS momentum ranks in the 100th percentile on a 90-day basis, a reading that explains why Wedbush has been willing to chase the target higher despite the stock's volatility.
Institutional positioning added an interesting layer in the most recent filings. Jane Street entered as the largest disclosed holder with 4.78 million shares as of late April, representing 7.5% of shares — a position built almost entirely in the quarter. Marex Group added 3.99 million shares to reach 6.3% of shares. Both are trading-oriented entities rather than long-only holders, which adds uncertainty about whether those positions are directional or part of arbitrage strategies. Meanwhile, insiders sold heavily through June: Lead Independent Director Jesse Chen offloaded roughly 56,000 shares across multiple tranches between June 2 and June 15, at prices ranging from $87 to $115 — well above the current $57.57. Director David Chang also sold 8,333 shares mid-month. The net 90-day insider figure is technically positive at $29 million but reflects those elevated price levels, not a bullish signal.
The clearest thing to watch into July 30 is whether the options conviction — the most bullish put/call positioning of the past year — finds any validation from the short book covering, or whether the two camps simply collide at the print. The last earnings release produced a 35% next-day move. With 25% of the float short and calls outnumbering puts by the widest margin in twelve months, the setup is maximally charged in both directions.
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