SoundHound AI, Inc. Raises Volume
When it comes to the world of AI technology, SoundHound AI (NASDAQ:SOUN) stands out due to its unique focus on voice applications. The stock may be an attractive prospect for investors bullish on AI and willing to embrace inherent risks and rewards.
This AI giant has an upcoming event that you need to be aware of. They’re releasing their Q1 2024 financial results on the 9th of May post-market close. Despite the company’s inconsistent EPS performance from quarter to quarter, this event might present a golden opportunity for investors.
It’s worth noting, though, that SoundHound AI has a history of not turning in profits and it’s predicted this trend will continue. Plus, with their decision to sell $150 million worth of shares via an at-the-market equity offering, potential share-value dilution concerns arise which may deter the risk-averse.
The stock is emphatically volatile, at one point gaining from $1.63 to $9 within the year, only to drop later to $4.40. This volatility may persist, especially considering the forthcoming earnings event. Perhaps prudence would suggest waiting for the Q1 results before making a move.
However, volatility can sometimes lead to attractive opportunities. Case in point, the sudden 10% rally on April 23rd of SoundHound AI stock, attributed to a market bullish on AI. So as overall AI sentiment fluctuates, so too might the stock’s value, which could possibly work to the investor’s advantage. In fact, Brett Knoblauch, an analyst at Cantor Fitzgerald, sees equal possibility for upside and downside risk after the stock’s devaluation, leading to an upgrade in rating from “underweight” to “neutral.”
Nevertheless, investing in SoundHound AI stock shouldn’t be an impulsive decision. As enticing as it may be when the stock price is low, always consider the volatility factor. Also, avoid the temptation to overindulge. A small share position would be a wise move to manage the instability.
In conclusion, while SoundHound AI is undoubtedly an interesting player in a specific AI market segment, the stock is rated as a “B.” After the release of the company’s quarterly results on May 9, a reassessment of its standing is recommended.
