SoundHound AI Stock Takes a Hit Amidst Elevated Expectations
The artificial intelligence (AI) company’s share price plummeted 8% as of 11:45 a.m. ET, with a brief dip of 11% earlier in the session. This significant decline comes amidst a broader market downturn, with the S&P 500 index down 0.5% and the Nasdaq Composite index down 1.2%.
Investor Disappointment at CES
SoundHound AI investors were eagerly anticipating potential news from the Consumer Electronics Show (CES) trade show, particularly after Nvidia CEO Jensen Huang’s keynote address last night. Unfortunately, Huang failed to mention SoundHound AI, leading to a wave of sell-offs. Nvidia has an investment in SoundHound, and even indirect news can significantly impact the smaller company’s stock.
In-Vehicle Voice Commerce Platform Unveiled
Despite the disappointment, SoundHound AI unveiled its first in-vehicle voice commerce platform today, allowing users to order from restaurants directly through their vehicle’s infotainment system. The company is demoing the platform at its CES booth and will present through January 10.
Volatility Ahead
With a market cap of roughly $6.8 billion, SoundHound AI is valued at roughly 41 times this year’s expected sales. This growth-dependent valuation sets the stage for potential downside pressures if positive catalysts fail to materialize or the broader market turns bearish.
Long-Term Potential Remains Strong
Despite today’s setback, SoundHound AI’s business has been adding customers and growing sales at an encouraging clip. The company has built a highly scalable platform with a wide variety of use cases yet to be tapped. Management raised its midpoint sales growth target for 2024 to 82%, with expectations of accelerating growth to more than double in 2025.
A High-Risk, High-Reward Play
While SoundHound AI stock remains a high-risk, high-reward play, the business has been serving up impressive growth and has significant opportunities ahead. Before investing, consider the Motley Fool Stock Advisor analyst team’s top 10 stock picks for investors to buy now – a list that didn’t include SoundHound AI. These 10 stocks have the potential to produce monster returns in the coming years.
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