Wolfspeed Heads Into Its Print With 107% of Float Sold Short

Wolfspeed arrives at today's earnings release carrying what may be the most extreme short positioning in the semiconductor sector, and the data has grown more acute since the October 21 note.

Short interest has climbed further, now reaching 107% of the free float, up from 104% a week ago. That means borrowed shares outstanding exceed the entire tradeable float by a meaningful margin. The borrow market leaves no room for new shorts: availability has been at zero for weeks, with every share in the lending pool already lent out. That floor has held almost without interruption since mid-September. The cost to borrow, at 2.05%, has ticked up roughly 9% on the week, a small but notable move given how long availability has been pinned at zero. The ORTEX short score of 77.7 ranks in the 2nd percentile of the universe, flagging this as one of the most heavily shorted names across the market.

Options traders are pulling in the opposite direction. The put/call ratio has dropped to 0.30, more than a full standard deviation below its 20-day average of 0.38, and close to the lowest level of the past year at 0.29. That is a strikingly call-heavy posture for a stock where shorts have borrowed more shares than exist in the tradeable float. The stock itself has recovered 8% on the week to $26.64, though it remains down 3% over the past month. Peers have moved broadly higher on the day too, with NVTS up 11% and AMBQ up 7%, so some of the near-term lift is sector-wide.

The analyst community has not grown more optimistic. Susquehanna trimmed its target to $25 from $30 on October 21, keeping a Neutral rating, and TD Cowen reinstated at Hold with the same $25 target in August. The consensus price target of $25 sits just below the current price, a rare configuration where the stock has actually run past where analysts are comfortable. Bears point to a company still burning cash while ramping silicon carbide capacity, with days to cover at 4.25 and the lending market fully closed to new entrants. Bulls, reflected in the call-heavy options flow, are positioned for a squeeze or a guidance beat that forces short covering into a zero-availability borrow market.

Institutional ownership adds one more layer of tension. T. Rowe Price added 4.7 million shares in the most recent quarter, building a 12.6% stake. Invesco and State Street both added newly disclosed positions. Against that fresh institutional buying sits Renesas Electronics, which holds 31.8% of shares and has not changed its position, a cornerstone stake that constrains the actual available float further and helps explain why short interest can mathematically exceed 100%.

The print will test whether Wolfspeed's silicon carbide ramp is generating enough revenue momentum to justify the call-heavy positioning that has appeared in options over the past two weeks, or whether the bear case, built at zero availability with shorts locked in at low borrow rates, is validated by the numbers.