SoundHound AI heads into the final stretch of Q3 with short sellers firmly in control, insiders cashing out, and the stock down 18% over the past month to $5.84.
The short positioning is extreme by almost any measure. Short interest has climbed to 42.7% of the free float, up nearly 5% over the past week alone and 5% over the past month, with days to cover running at nearly seven. More telling is the borrow market: availability has been at 0% for most of the past six weeks, meaning every share in the lending pool is currently out on loan. The 52-week low for availability matches the current reading. Cost to borrow, at 3.45%, has actually eased substantially from the 8.6% level seen in mid-August, suggesting the squeeze pressure on new shorts has relaxed even as the position itself has grown. That combination, maximum borrow tightness but falling cost, reflects a pool that has stabilised rather than one being actively raided for new shorts. ORTEX's short score for SOUN stands at 76.6, ranking in just the 3rd percentile of all stocks on short score, meaning bearish data signals here are more intense than on 97% of the market.
Options traders are telling a very different story, and the contrast is worth naming. The put/call ratio of 0.33 sits slightly below its 20-day average of 0.34, with a z-score of -0.53. That's modestly more bullish than the recent norm, not defensive. The 52-week high on PCR was 0.67, so today's reading is near the low end of the annual range. In a stock carrying 42% short interest and zero availability, options positioning looks almost serene, which either signals that call buyers are leaning against the short thesis or that the options market is simply not the venue where bearish sentiment on SOUN is being expressed.
The Street is cautious but split. Piper Sandler cut its target to $6 on 22 September, just above the current price, while maintaining a Neutral rating. That followed another cut from DA Davidson in August, which pulled its Buy target down to $10 from $12. The mean price target across analysts is $12.57, more than double the current price of $5.84. That gap reflects a divergence between bulls who still credit the $350 to $400 million revenue projection for 2027 and the accretive potential of the LivePerson acquisition, and bears who flag the pace of cash burn, competitive pressure in AI voice, and the debt integration risk. EPS surprise ranks in the 87th percentile, suggesting SoundHound has a track record of beating estimates, though momentum scores (EPS momentum over 30 and 90 days ranks in the 4th and 13th percentile respectively) point to estimates being cut more recently. Factor positioning is bearish overall, with utilization rank at the 4th percentile and short score rank at the 3rd.
Insider activity this month is worth noting, and it leans one way. On 15 September, five insiders filed open-market sales on the same day: CEO Keyvan Mohajer sold 137,290 shares at $6.33 for roughly $869,000, while the COO, Chief Product Officer, and Chief Strategy Officer each filed sales ranging from 38,730 to 71,113 shares. None were flagged as part of a pre-arranged 10b5-1 plan. Director Diana Sroka also filed a small sale on 17 September, not under a plan. The net 90-day insider flow is negative $1.83 million across 288,758 shares. The CFO received two tranches of restricted stock grants on 4 September, totalling over one million shares, though those are compensation awards rather than open-market conviction buys. The cluster of discretionary sales from multiple senior insiders at prices above the current $5.84 level adds weight to the bearish case.
Retail attention has pulled back sharply. Wikipedia page views for SoundHound are running 2.6 standard deviations below their own 90-day norm, pointing to a meaningful drop in casual investor engagement from the highs seen earlier in the year.
SoundHound's most recent earnings prints have been volatile. The August 2026 release produced a 24.7% one-day gain and a 16.3% five-day move. The next event is pencilled in for 5 November. With short interest near a structural ceiling (zero availability limits new additions), a cost-to-borrow that has been compressing, and a cluster of insider sales on record, the setup into that print is one where the tension between a heavily shorted float and management's own selling activity will determine which signal the market weights more.
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