STMicroelectronics heads into its Q2 earnings print tomorrow with a 4% Tuesday bounce that flatters what has been a bruising week — the stock is still down 7% over seven days and 16% over the past month.
The prior note, published two days ago, described short sellers retreating ahead of the print. That picture has sharpened further. Borrow availability has expanded to over 4,400% — one of the loosest readings across European semiconductors — and the cost to borrow remains negligible at 0.74%. Availability was actually tighter a fortnight ago, running around 1,300–1,700% in late June and early July, before the lending pool opened up dramatically. The short score has drifted lower all week, from 28.5 on July 13 to 26.6 today, confirming that any residual short pressure is unwinding rather than building. Shorts are not the story into tomorrow's numbers.
The earnings history is the more charged angle. The April 23 Q1 print delivered a 15.8% single-day move and a 22.8% five-day gain — an extraordinary reaction by any measure. The pattern from recent quarters skews firmly positive on the day: the last two earnings events both produced double-digit moves higher within a week of the release. That context makes the current month's 16% drawdown interesting — it means the stock enters tomorrow's print having already given back much of what it gained after Q1, with a relatively compressed multiple. The price-to-earnings multiple has contracted by more than 10 points over the past 30 days, and the price-to-book has shed nearly 0.7 turns over the same period, both moves reflecting the sharp price decline rather than any fundamental re-rating.
Factor positioning remains constructive. EPS momentum ranks in the 89th percentile on both 30- and 90-day timeframes, and forward EPS growth ranks equally high. The short score rank — the 95th percentile — reflects how benign the short interest setup looks rather than elevated squeeze pressure. Among close peers, IFX is also down roughly 6% on the week, and MRVL has dropped a similar amount. ARM and LSCC have bucked the group, finishing the week up 3% and 1.4% respectively — the divergence suggests stock-specific dynamics rather than a uniform sector rotation driving STM's weakness.
The ownership picture adds context without changing the story. BlackRock added over 1.1 million shares as of mid-July. Barclays added 3.6 million shares in late June. Van Eck and Amundi each built positions of more than 2 million shares in late June and early July — all moves made into the weakness, not away from it. On the insider side, the most recent trades from late May were a combination of awards and routine sell-to-cover disposals at prices around €59–€60, marginally above Tuesday's close of €57.25. The net 90-day insider flow was positive in value terms, though modest given the company's scale.
Tomorrow's Q2 release is the only thing that matters now — the key question is whether management's guidance for the second half moves toward inventory normalisation, or whether softening automotive and industrial demand forces another revision lower.
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