SoundHound AI has cleared its May 22 earnings call and the short base is finally starting to thin — but only marginally, and the borrow market remains as locked as it has been for weeks.
Short interest has pulled back from its mid-May peak but is still extraordinarily heavy. At 39.0% of the free float as of May 25, it has declined from the 39.4% peak hit on May 12 — a modest 2.4% week-on-week reduction in shares short that barely registers given the scale of the position. More telling is the direction over the past month: short interest is still up 6.6% from late April levels, meaning the net move since the Q1 print on May 7 has been accumulation, not retreat. Availability remains at exactly 0% — every share in the lending pool is still lent out. No new shorts can be added. Those already in have seen the cost to borrow ease to 21.4% from a peak near 61% in early May, but that is still a genuine carry burden for a name at $8.17. The ORTEX short score is 84.3, fractionally lower than the 85.3–85.7 range it held all last week. The short book has not broken — it has settled.
Options traders continue to read the setup differently from the short community. The put/call ratio is 0.46, almost exactly on its 20-day average of 0.45 and a long way from the 52-week high of 0.67. There is no defensive skew visible in the options market. That disconnect was the defining tension heading into the May 22 earnings call, and it remains the defining tension now: a heavily congested short base paying meaningful carry sits alongside options positioning that registers no particular alarm.
The earnings result itself is now on the record. SOUN fell 5.2% the day after the May 7 Q1 print and extended that to a 9.1% loss over five days. The May 22 call closed the same day, and the stock is down 2.9% on the week — a more contained reaction than May 7, though still negative. With the next earnings event not until August 6, the short base now faces a long runway without an obvious near-term catalyst to force a cover. Cost to borrow will determine whether that pressure builds.
The Street remains bifurcated. The analyst consensus is a hold, with DA Davidson maintaining a buy and a $14 target, while Piper Sandler holds a neutral with a $9 target — essentially bracketing the current $8.17 price. HC Wainwright trimmed its target to $20 in March from $26, reflecting some valuation caution at the bullish end. The bull case centres on SoundHound's debt-free balance sheet, diversified revenue streams, and leadership in voice AI. The bear case points to a forward revenue multiple that prices in flawless execution in a market where competition is accelerating. EPS momentum factor scores are near the top of the universe — 99th percentile on 30-day momentum and 98th on 12-month forward growth — which helps explain why buy-side interest has not collapsed despite the sell-off.
Among correlated peers, the week has been sharply asymmetric. QBTS surged 44.5% and ARQQ jumped 31.1%, while SOUN fell 2.9%. That divergence highlights the speculative-tech cohort bifurcating around near-term catalysts rather than moving as a bloc. Goldman Sachs added 3.5 million shares in Q1, and BlackRock increased its position to 7.5% of shares in April — providing some institutional demand beneath the surface. The pattern to watch into the summer is whether cost to borrow continues its post-earnings descent or re-accelerates, and whether any of the locked lending pool begins to free up as the August earnings date draws closer.
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