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Soundhound AI (Thorn -7.52%) Stocks fell on Monday. The company’s stock price ended up falling 7.5%, according to data from S&P Global Market Intelligence. The stock was volatile in intraday trading, rising as much as 2.1% and falling as much as 11.7%. on the other hand, S&P500 The index closed up about 0.8% today.
There was no business-specific news that pushed SoundHound stock down today, but the company’s stock lost ground amid the volatility of other high-profile artificial intelligence (AI) stocks. Expectations are particularly high for Nvidia and super microcomputer In the end, the audio technology company’s stock price fell.
SoundHound stock will be influenced by AI leaders
SoundHound stock has seen frequent bullish and bearish price movements this year, consistent with moves in Nvidia, Supermicro, and other closely watched AI stocks. All in all, this is great for an audio tech stock, as this dynamic has pushed the company’s stock price up 288% for all of 2024 trading. However, interrelated evaluation dynamics also contribute to variation.
Supermicrocomputer stocks were added to the S&P 500 index today. Even though its inclusion in the benchmark index is likely to create a positive trigger for the server specialist’s long-term valuation of the company’s stock, the addition to the index will ultimately “sell the news” to investors, already rising It appears that the large rise in stock prices caused the company to take profits. recorded.
Meanwhile, Nvidia today kicked off its annual GPU Technology Conference (GTC). Some investors seemed to be betting that Nvidia or SoundHound would announce some big new technology earlier in the day. Meanwhile, Nvidia actually announced a new GPU. By the time the market closed, the AI leader’s stock was actually down about 1% in after-hours trading.
What’s next for SoundHound stock?
SoundHound has a lot of work to do on the heels of an incredible rally. Even considering today’s decline, the company’s valuation is approximately 36.6 times this year’s expected sales.
SOUN PS Ratio (Forward) Data by YCharts
SoundHound expects sales to reach $45.9 million in 2023, an approximately 47% year-over-year increase, before 2024 sales of $63 million to $77 million. Had the company reached the midpoint of its guidance range, sales would have increased by about $53. % compared to previous year.
SoundHound appears poised to achieve rapid sales growth, but it remains to be seen when the company will be able to move on to delivering solid profits and strong revenue growth. After such an explosive rally, the stock looks risky, even if excitement about AI and strong sales growth could push it higher.
Keith Noonan has no position in any stocks mentioned. The Motley Fool has a position in and recommends Nvidia. The Motley Fool has a disclosure policy.
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