Today's significant decline in SoundHound AI's stock value is drawing attention.
SoundHound AI's stock is taking a hit in Tuesday's trading, plummeting 8% as of 11:45 a.m. ET, and even dipping as low as 11% earlier in the session. Despite the bearish market climate and elevated expectations for news from the Consumer Electronics Show (CES), the conversational AI company is feeling the heat.
The CES trade show kicked off with a keynote address from Nvidia CEO Jensen Huang last night, but unfortunately, SoundHound AI wasn't mentioned. The tech giant has invested in SoundHound, and any news about Nvidia can sometimes have shocks on its smaller partner's stock. Nonetheless, SoundHound AI unveiled its first in-vehicle voice commerce platform today, allowing users to order food directly through their vehicle's infotainment system. However, investors may have been hoping for a more groundbreaking announcement from the company.
So, what's in store for SoundHound AI? The stock has a history of swaying with the wind, as it's valued at approximately 41 times this year's expected sales. This growth-dependent valuation can open the door to downside pressures if positive catalysts falter or the broader market shifts to bearish territory. Despite the stock's recent dip, the company has been performing well, adding customers and growing sales at a steady pace. Plus, it has a highly scalable platform with a multitude of untapped use cases.
With its last quarterly update, SoundHound AI raised its midpoint sales growth target for 2024 to 82%. And get this – the company predicts its sales growth will accelerate to over double in 2025! Although the stock presents high risks and high rewards, SoundHound AI has been consistently delivering impressive growth and some exciting opportunities ahead.
As for the future, SoundHound AI is making significant strides. It recently introduced its "Brand Personalities" feature for its SoundHound Chat AI Automotive voice assistant, enabling automakers to cultivate unique, customizable personas tailored to their brand identity. This feature boosts the user experience and bolsters brand loyalty, both for individual vehicle lines and regional preferences.
Moreover, the company is displaying its innovative in-vehicle voice platform, SoundHound Chat AI, which integrates real-time and generative AI capabilities with the NVIDIA DRIVE AGX platform at CES 2025. And to top it off, SoundHound AI has signed substantial partnerships, like the one with Rekor, a roadway intelligence company, to enhance emergency services with voice commands.
As for the long-term outlook, SoundHound AI's stock is projected to rise substantially over the next few years. Sources forecast the stock to reach $8 by the end of 2025, $10 by the end of 2026, and $12 by the end of 2027. Despite its current volatility, it appears that SoundHound AI has a bright future ahead in the AI space, particularly in the automotive and voice assistant sectors.
Investors might be feeling pressures due to SoundHound AI's stock dip, as it decreased by 8% during Tuesday's trading and dipped further earlier in the session. Despite this, Nvidia's CEO Jensen Huang didn't mention SoundHound AI in his CES keynote address, although Nvidia has invested in the company. Regardless of the market climate and expectations from CES, managing finance effectively is crucial for SoundHound AI to navigate these pressures. With its impressive growth and promising future in the AI space, especially in the automotive and voice assistant sectors, SoundHound AI could be an intriguing investing opportunity for those with a high risk tolerance.
