SOUN Arrives at Earnings Eve With Shorts Still Trapped and Costs Still Rising

SoundHound AI reports on August 5 with four days to go, and the structural picture has not broken: the short book has grown again, the borrow market remains completely sealed, and options traders are still leaning call-side heading into the print.

The borrow market is the defining feature of this setup, and it has not moved in any direction that favors existing shorts. Availability has printed 0% every single session across the entire 30-day window — not one day of slack, not one share returning to the pool. Against that locked backdrop, cost to borrow has continued its slow grind higher, reaching 15.1% on July 30. That is up roughly 3% from seven days ago and about 10% above where it was a month prior. The short book itself has kept growing: short interest now stands at 43.8% of the free float, up from the 43.6% reported in the prior note and from the 42.2% level flagged two weeks ago. Each successive article has recorded a new high. Shorts are adding exposure at a rising carry rate with zero borrow available to cover a rapid exit — the ORTEX short score of 81.3 places this name in the 1st percentile of the broader universe for squeeze pressure. Peers moved meaningfully higher this week: MSFT gained 22% and ZETA added 13%, while SOUN fell 0.5%.

Options positioning offers the one piece of relative calm in an otherwise charged setup. The put/call ratio is running at 0.36 — essentially flat with the 20-day average of 0.37 and well below the 52-week high of 0.67. Options traders are not rushing to buy downside protection. There is no defensive skew, no z-score spike. The call-side lean has been consistent for weeks and has not shifted into the event window, which means the options market and the short market are pulling in opposite directions heading into Tuesday's report.

The Street remains cautiously constructive on a trailing basis, though the most recent analyst activity is now dated. The consensus is a buy, with a mean price target around $13 — roughly double the current price of $6.13. That gap reflects the divide the prior notes described: bulls point to debt-free operations, 80%-plus revenue growth, and strong forward EPS revision momentum (the EPS momentum factor ranks in the 99th percentile over 90 days). Bears focus on a valuation still running at roughly 15x forward revenue and the execution risk in a crowded voice AI field. The most recent target cut — Northland lowering to $12 in May after the prior quarter — is worth noting, though no material analyst moves have been recorded in the two weeks prior to today.

Insider activity reinforces the cautious read. Five executives — including CEO Keyvan Mohajer, co-founder Seyed Emami, COO Mike Zagorsek, and CTO Tim Stonehocker — all sold in mid-June, collectively reducing holdings at prices around $7.46, well above where the stock trades today. The sales were modest in dollar terms but broad in participation: the entire senior team moved on the same date. The net insider position over the past 90 days reflects roughly $4.1 million in net selling from the inside.

The last two earnings prints both produced negative next-day moves of 2.3% and 5.2% respectively, though the May print then recovered with an 8% gain over the following week. The setup for August 5 is one where the structural tension — trapped shorts, rising carry costs, a call-heavy options book — means the amplitude of any post-print move is likely to be amplified in either direction by the mechanics of an illiquid borrow market, and what to watch is whether any movement in availability signals that positions are beginning to shift in the hours before the report.