AXT, Inc. enters its July 30 earnings week with the most interesting development being not what shorts are doing, but what they are stopping doing.
Bears have started trimming. Short interest peaked at 11.75 million shares — 25.2% of free float — on July 17, the high-water mark flagged in the prior two notes. By July 21 that had eased to 10.94 million shares, or 24.4% of float. The ORTEX short score has tracked the same retreat: it hit 57.5 on July 17 and has since pulled back to 52.5. That is still a heavy position by any standard, and the 30-day picture remains stark — shorts have grown 48.6% over the past month. But the sprint phase has cooled. Some bears appear to be reducing rather than adding with eight days left to the print.
The borrow market reinforces that read. Availability is wide at 415%, up from 374% two weeks ago — roughly four shares sitting idle in the lending pool for every one already borrowed. Cost to borrow is a negligible 0.52%. There is no squeeze pressure here: bears are trimming voluntarily, not being forced out by funding costs or a drying pool. That distinction matters. A voluntary pre-earnings trim reads as profit-taking on a thesis, not capitulation.
Options traders are telling a different story — and an increasingly bullish one. The put/call ratio has dropped to 0.54, well below its 20-day average of 0.76 and 1.36 standard deviations below that mean. For context, the PCR was running above 1.0 through most of June, meaning options positioning has rotated from defensively loaded to call-heavy in the space of six weeks. The 52-week PCR low is 0.0065, so there is theoretical room to run further, but the direction of travel is unambiguous. Calls are dominating option flow ahead of the earnings date.
The earnings history reinforces why both camps are active. The last quarterly print on April 30 produced a 35% single-day move and a 52% five-day follow-through. That is the kind of outcome that draws both aggressive short sellers and aggressive call buyers — and helps explain why the structural bear position has held even as near-term options positioning tilts bullish. The street remains split. Wedbush maintained Outperform and lifted its target to $93 after the April print, while B. Riley and Needham downgraded earlier in the year. The mean analyst target of $96.50 is above the current $56.51 close — though most of that target setting pre-dates the stock's sharp retracement from the $110-plus levels seen in mid-June, and the data is flagged as stale (49 days old). Treat that target with caution.
The insider tape is worth noting separately. Founder and CEO Morris Young sold 123,601 shares at $113.33 in early June — a $14 million transaction executed at prices more than double where the stock trades today. Lead Independent Director Jesse Chen followed with multiple tranches across June at prices ranging from $86 to $115. These were sales into strength, not distressed exits, but the timing aligns precisely with the stock's peak before a 33% one-month decline to current levels. The net 90-day insider position is a positive 265,836 shares in aggregate, but the composition of that figure deserves scrutiny.
What to watch into July 30: whether the options PCR continues compressing toward its recent lows — signalling maximum call loading before the print — and whether short interest holds above 24% or slides further, narrowing the gap between the two camps that have defined this stock's setup all month.
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