SoundHound AI: Soaring Success in 2024, Facing Challenges in 2025

Why SoundHound AI Stock Skyrocketed 835.8% in 2024 but Is Plummeting in 2025 | The Motley Fool

SoundHound AI (SOUN -9.04%) stock was one of the market's biggest winners in 2024. The company's share price skyrocketed 835.8% across last year's trading, according to data from S&P Global Market Intelligence. SoundHound AI is an early leader in the conversational artificial intelligence (AI) space, and its share price saw massive growth last year in conjunction with rising demand for voice-based software interfaces and other positive catalysts. The stock got a big boost early in 2024's trading after it was announced that Nvidia had invested in the company, and it saw bullish momentum accelerate late in the year following some enthusiastic endorsements from analysts. SoundHound AI stock posted big gains in 2024 thanks to quarterly reports that arrived with strong revenue growth. For example, the company's third-quarter report showed that sales in the period had risen 89% year over year to reach $25.1 million. Thanks to stronger-than-expected performance, the company also raised its sales growth target for 2024 to between $82 million and $85 million -- suggesting annual growth of roughly 82% at the midpoint of the guidance range. The company also raised its sales guidance for 2025 to between $155 million and $175 million, which suggests that revenue will more than double this year if the business hits the midpoint of management's guidance. While the company's share price actually saw pullback on some of its earnings releases this year, the results were ultimately strong enough to support subsequent bullish coverage from analysts that helped push the company's valuation higher. On Dec. 16, Wedbush analyst Dan Ives published new coverage that maintained a buy rating on SoundHound and raised the firm's one-year price target on the stock from $10 per share to $22 per share. On Dec. 23, H.C. Wainwright published a note on the stock, raising its one-year price target from $8 per share to $26 per share. SoundHound AI stock also posted big gains in conjunction with new partnership and service announcements across last year. The company announced that restaurant chains including Torchy's Tacos and Church's Texas Chicken had begun using its services. SoundHound stock saw gains in conjunction with auto conglomerate Stellantis rolling out its conversational AI platform for some of its automobiles. SoundHound AI stock has been losing ground early in 2025's trading amid macroeconomic pressures, concerns about new competition, and geopolitical risk factors. The company's share price is down 33% across the year's trading as of this writing. This year's annual CES kicked off with a keynote speech from Nvidia CEO Jensen Huang on Jan. 6 and ran through Jan. 10. Some investors had been hoping that the tech leader would give SoundHound AI a shoutout, but this never materialized. Instead, new agentic AI software from Nvidia and other tech players was highlighted at the show, and investors are concerned that the conversational AI specialist could soon face more competition. As a company with a highly growth-dependent valuation, SoundHound AI stock has also seen outsized sell-offs in conjunction with rising macroeconomic and geopolitical risks. The latest report from the Bureau of Labor Statistics showed that far more jobs than expected were added in December, which has raised concerns that inflationary pressures could return. Adding another bearish catalyst, the U.S. has announced new regulations on the export of AI chip stocks to China and other adversarial nations. Even on the heels of big sell-offs in 2025, the company's share price is still up 625% over the last year of trading. The company now has a market capitalization of $4.9 billion and is trading at approximately 30 times this year's expected sales. With a strong sales growth outlook for this year, SoundHound AI stock has avenues to getting back to an upward trajectory. But the company's highly growth-dependent valuation could also set the stage for continued volatility if macroeconomic and geopolitical conditions cause investors to become more risk averse.

Why SoundHound AI Stock Skyrocketed 113.1% in December but Is Plummeting in 2025 | The Motley Fool

SoundHound AI (SOUN -14.91%) stock posted a month of explosive gains across December's trading. The conversational artificial intelligence (AI) company's share price closed out last month up 113.1%, according to data from S&P Global Market Intelligence. SoundHound AI closed out 2024 with some of the stock market's most impressive gains, posting a share increase of 836% across the stretch. The company finished the year with another month of growth thanks to new contract wins and bullish coverage from analysts. Wedbush's Daniel Ives kicked off a massive bullish run for the company with a note that radically updated the firm's outlook on the stock. While Ives maintained a buy rating on the stock, he raised his one-year price target from $10 per share to $22 per share. Ives thinks SoundHound remains in the early stages of capitalizing on large long-term growth opportunities in the enterprise market. SoundHound was also named as a leader in conversational AI in a report from Frost & Sullivan. Thanks to the company's acquisition Frost & Sullivan thinks SoundHound is positioned as an early leader in the conversational AI market for healthcare. Thus far, the majority of SoundHound's revenue has come from automotive applications and the restaurant industry. The company's share price also gained ground following the participation of CFO Nitesh Sharan and CEO Keyvan Mohajer in multiple conferences. SoundHound AI now has a market capitalization of roughly $6.2 billion and is valued at roughly 38 times this year's expected sales. While the company does have a highly growth-dependent valuation, it has been serving up rapid sales expansion and actually anticipates that growth will accelerate in the near term. SoundHound AI stock has started off 2025 with some significant pullbacks. As of this writing, the company's share price is down roughly 25.5% year to date. SoundHound AI's share price is losing ground in the face of macroeconomic risk factors. Recent jobs data from the Bureau of Labor Statistics suggests that the economy could still be running hotter than expected, and reports have suggested that President-elect Donald Trump is considering declaring a national economic emergency in order to implement tariffs after entering office. Investors may also have been expecting SoundHound to announce more at this year's CES trade show. If SoundHound continues on its current growth trajectory and manages to improve its margins as it scales, the company could still have significant upside. On the other hand, the company's gross margin has slipped over the last year in conjunction with its sales growth. SoundHound AI is a high-risk, high-reward play in the AI category. With a massive market opportunity still ahead, the company has pathways to growing into and exceeding its current valuation. But investors should move forward with the understanding that shares could face significant downside pressures if growth comes in below Wall Street's expectations or progress on the margins front fails to materialize.

Is SoundHound AI Stock a Buy Now? | The Motley Fool

There may not be a hotter stock heading into 2025 than SoundHound AI (SOUN 2.28%). SoundHound AI rose 836% in 2024, making it one of the best-performing stocks in the market. Just a few weeks ago, it was up over 1,000%, but a pullback to end the year took away some of those gains. With the stock falling nearly 20% from its all-time highs, some investors might see this pullback as an entry opportunity. While there are some key risks to understand with SoundHound, this could be a chance to get in on the stock before it heads higher. SoundHound AI is obviously an AI company, but what sets it apart is how it inputs data into the AI model. Most generative AI models require users to input text into the program to get an output. SoundHound uses audio inputs to do this, which is an important segment. While this isn't a new technology by any means (think about Siri or Alexa), the results haven't been that great. Having a digital assistant process what you said incorrectly is frustrating and turns many off to the technology. However, SoundHound's product is much more advanced and outperforms human counterparts in many scenarios. This has caused SoundHound's product to be adopted in many industries, including car digital assistants, restaurant drive-thru and mobile ordering, as well as banking and insurance. This widespread adoption is part of the reason SoundHound's stock had a large run-up to the end of the year. During its Q3 earnings report, SoundHound noted that 90% of revenue came from the automotive sector and 72% came from a single client. Now, no sector makes up more than 25%, and its largest client only contributes 12% of revenue. That's huge news for diversification and gets SoundHound past a critical time in the expansion process. But SoundHound isn't stopping there. Management projects massive growth for 2025, with revenue projected to come in between $155 million and $175 million -- nearly double 2024's $82 million to $85 million guidance. This has investors excited about the stock and ignited the run-up to close 2024. There is a huge use case for audio inputs into AI models, and if SoundHound's product emerges as the top option in the space, it will make a ton of money. But has all of that success already been baked into the stock price? In Q3, SoundHound's revenue rose 89% year over year. While that's solid growth, it is far less than the stock price has increased. As a result, the stock's valuation has gotten incredibly expensive. At around 90 times sales, SoundHound's stock is far from cheap. It's far more common to see software companies trade for about 20 times sales, which it did for the middle half of the year. Then again, most software stocks don't double their revenue year over year for multiple years. So, what kind of success has been baked in already? If SoundHound can double its revenue in 2025 and 2026, its revenue would increase fourfold and drop its valuation back to the 20 times sales range, but only if the stock price stays flat. That shows how lofty the expectations are for SoundHound, but is that warranted? If its revenue increased fourfold from 2024's projections, it would be around $336 million. There are still plenty of software companies larger than that, so this isn't an outlandish number. However, Wall Street analysts currently estimate SoundHound's 2026 revenue to be around $202 million. That's a complete shot in the dark, so it shouldn't be taken as a solid projection, but it is good to know that Wall Street doesn't think SoundHound AI can achieve a revenue double in 2026, at least right now. So, should you buy the dip? I'd say be patient and wait, or take a very small position to keep track of it. That way, if it runs up further, you'll still benefit. But you can load up more if it dips further. There's a lot of hype in SoundHound's stock, and that can cause violent price swings from day to day. You'll have to weather the volatility, but SoundHound has a promising product that could be a difference-maker in the decade to come.

Is SoundHound AI Stock a Buy? | The Motley Fool

The rapidly growing artificial intelligence (AI) market fueled a surge in the price of many AI-focused stocks. One of these is SoundHound AI (SOUN -6.19%). Over the past 12 months, its stock skyrocketed an eye-popping 848% through Jan. 6. Part of these gains are due to its status as a meme stock. Another driver was H.C. Wainwright analysts boosting SoundHound's price target to $26 in December. Given the stock's massive price increase, it's fair to wonder whether SoundHound shares are a buy. Here's a look at the business to help determine if now is the time to invest in this AI company. SoundHound uses AI to provide businesses with software that understands human speech in 25 languages. Its breadth of supported languages helped it generate more than half its revenue outside the Americas during the first nine months of 2024. The company once produced over 90% of its income from international markets, but that changed after SoundHound made some strategic acquisitions. The new businesses resulted in sales in the Americas soaring 963% over the first three quarters of last year. SoundHound's key acquisitions included SYNQ3, a voice AI provider to the restaurant industry, and Amelia, whose AI software expanded SoundHound's presence into industries such as financial services and healthcare. Thanks to these additions, SoundHound's third-quarter revenue rose 89% year over year to a record $25.1 million. This led to the company raising its 2024 full-year guidance from a minimum of $63 million in sales to $82 million. It also expects 2025 to bring in between $155 million and $175 million in revenue. Not only did its acquisitions enable SoundHound to enjoy a substantial revenue jump, it reduced the company's reliance on a single, large customer. In 2023, 72% of the company's sales were to its largest client, but as of the end of Q3, that percentage had dropped to 12%. In addition, its balance sheet is solid. SoundHound exited Q3 with total assets of $499.7 million with $135.6 million in cash and equivalents. Contrast this with total liabilities of $203.7 million. Although its acquisitions helped, they came with a downside. The new businesses contributed to a decline in SoundHound's gross profit margin. In Q3, the company's gross profit margin was 49%, a substantial drop from the previous year's 73%. Management stated margins are expected to improve over time from cost synergies once integration of its acquisitions is complete. This is important because SoundHound itself isn't profitable. It exited Q3 with a net loss of $21.8 million. The lack of profitability isn't an issue so long as the company's sales can continue growing. Many tech companies sacrifice profits in favor of expanding their businesses as rapidly as possible. That's what SoundHound is doing. Overall, SoundHound is in a better position than it was a year ago. Reducing its reliance on a single customer was a critical step in building a long-term business. At the same time, it expanded into many other industries where, a year ago, 90% of its revenue was concentrated in the automotive sector. Today, SoundHound is well positioned to benefit from the tailwind of the AI market's expansion. Forecasts predict the AI sector to hit $244 billion in 2025, up from 2024's $184 billion, and to reach $827 billion by 2030. This contributes to the factors making SoundHound a compelling investment. But is now the time to buy, especially since shares are down from a 52-week high of $24.98 reached on Dec. 26? Let's take a look at SoundHound stock's price-to-sales (P/S) ratio. This metric tells you how much investors are willing to pay for a dollar's worth of revenue. As the chart shows, SoundHound's P/S ratio is extremely elevated compared to historical trends. This suggests the stock price is overvalued at the time of this writing. Therefore, while SoundHound is a promising company, now is not the time to buy. The ideal approach is to wait for the stock to drop further before scooping up shares.

Why SoundHound AI Stock Is Plummeting Today | The Motley Fool

SoundHound AI (SOUN -10.58%) stock is seeing big sell-offs in Tuesday's trading. The conversational artificial intelligence (AI) company's share price was down 8% as of 11:45 a.m. ET and had been down as much as 11% earlier in the session. Meanwhile, the S&P 500 index was down 0.5%, and the Nasdaq Composite index was down 1.2%. SoundHound AI is losing ground today in conjunction with an uptick in selling pressures for the broader market. In addition to the bearish trading backdrop, the company's stock is seeing sell-offs due to elevated investor expectations about potential news from the Consumer Electronics Show (CES) trade show. Nvidia CEO Jensen Huang kicked off this year's CES trade show with a keynote address last night, and some SoundHound AI investors were hoping the tech leader would mention the conversational AI specialist in his speech. Nvidia has an investment in SoundHound, and even seemingly unrelated news for the AI leader is sometimes enough to power substantial moves for the smaller company's stock. Unfortunately, Huang's keynote address came and went without a mention of SoundHound. The conversational AI specialist did unveil its first in-vehicle voice commerce platform today, but it looks like investors were hoping for more groundbreaking news. The upcoming platform will allow users to order from restaurants directly through their vehicle's infotainment system. SoundHound is demoing the platform at its CES booth and will be presenting at the show through Jan. 10. As today's trading indicates, SoundHound AI stock is predisposed to volatile moves. With a market cap of roughly $6.8 billion, the company is valued at roughly 41 times this year's expected sales. That's a highly growth-dependent valuation that sets the stage for downside pressures if positive catalysts fail to arrive or fall short of expectations or the broader market turns bearish. On the other hand, the pullback for the stock at the start of this year's CES show probably doesn't say much about the company's long-term future. The business has been adding customers and growing sales at an encouraging clip, and it's built a highly scalable platform with a wide variety of use cases that have yet to be tapped. With its last quarterly update, management raised its midpoint sales growth target for 2024 to 82%. Even better, the company expects its sales growth to accelerate to more than double in 2025. So, while SoundHound AI stock remains a high-risk, high-reward play, the business has been serving up impressive growth and has some big opportunities ahead.

SoundHound AI Stock Exhibits The Market's Enthusiasm For Sky-High Valuations (SOUN)

While 100% revenue growth in FY2025 is plausible, sustaining momentum depends on sentiment. For long-term investors, SoundHound may be valid as a high-risk, low-weight speculative play. Investing in novel technologies and emerging companies can be exciting, rewarding, and lucrative. However, valuation remains the fundamental tenet of investing, and just six months ago a very valid deal could have been sought for SoundHound AI (NASDAQ:SOUN) stock. Now, the Oliver Rodzianko is an investment analyst specializing in the technology sector, grounded in timeless value principles. His expertise spans AI, semiconductors, software, and renewable energy, with a focus on companies that demonstrate resilient management and lasting competitive advantages. A trusted voice in financial analysis, Rodzianko's insights are frequently highlighted as 'Must Reads' on Seeking Alpha, syndicated to Forbes via GuruFocus, and published on TipRanks.Rodzianko specializes in value trading at inflection points without leverage and without short interest. He typically holds investments for one to two years, selling them at fair value. Additionally, he models a wealth-preservation portfolio and employs advanced risk-mitigation strategies to protect against and capitalize on recessions and market crashes. Analyst's Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Should Investors Buy SoundHound AI Stock on the Dip?

Parkev Tatevosian, CFA has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.

Why SoundHound AI Stock Is Sinking Today

SoundHound AI (SOUN -7.36%) stock is seeing a significant pullback in Friday's trading. The company's share price was down 7.3% as of 11 a.m. ET amid a 1.4% decline for the S&P 500 index and a 1.7% pullback for the Nasdaq Composite index. SoundHound AI stock is getting hit hard today following the latest U.S. jobs report. While the report showed that more jobs were added last month than broadly expected, this is actually a bearish development because it makes it less likely that the Federal Reserve will cut interest rates. SoundHound AI sinks on December jobs data The latest data shows that 256,000 net jobs were added in December, coming in far ahead of the average economist forecast for 155,000 jobs added in the period. In conjunction with the report, the yield on 10-year U.S. Treasury bonds rose to its highest level in more than a year. While adding new jobs can be considered a good thing in some respects, the development doesn't exist in a vacuum. Progress has been made on combatting inflation, but there are still concerns that the economy is running hot and upward pricing pressures could return and destabilize markets. With today's jobs report, investors received a decidedly bearish indicator. With last month's jobs numbers coming in far above expectations, the outlook for rate cuts in 2025 has become less bullish. SoundHound AI and other growth-dependent stocks are seeing particularly pronounced pullbacks today because lower interest rates tend to promote strong performance for relatively high-risk investments. What comes next for SoundHound AI? SoundHound AI has positioned itself as an early leader in the conversational artificial intelligence (AI) space, and it's been posting strong sales momentum as demand in the category has ramped. With its last quarterly update, the company raised its full-year sales guidance for 2024 -- and its midpoint target called for growth of roughly 82%. Even more impressive, the software specialist's midpoint target for 2025 suggests that sales will more than double this year -- marking a significant acceleration over last year's already-impressive growth. On the other hand, SoundHound AI still has a highly growth-dependent valuation and is trading at roughly 32 times this year's expected sales even after a significant pullback for its stock. With that in mind, the company's share price could see significant volatility if macroeconomic conditions continue to move in bearish directions or if earnings reports arrive with softer-than-anticipated results.

Why SoundHound AI Stock Is Getting Crushed This Week | The Motley Fool

SoundHound AI (SOUN -16.44%) stock is seeing dramatic sell-offs in this week's trading. The company's share price is down 27.2% from last Friday's market close, according to data from S&P Global Market Intelligence. The U.S. stock market is closed today in remembrance of President Jimmy Carter, but SoundHound AI stock has seen a big valuation pullback across this week's first three days of trading. The conversational artificial intelligence (AI) specialist's share price has suffered a big pullback in conjunction with macroeconomic risk factors and concerns about rising competition. On Tuesday, the Bureau of Labor Statistics (BLS) published its Job Openings and Labor Turnover Survey (JOLTS) data for November. The JOLTS survey showed that there were 8.1 million new job openings in the month, which came in ahead of the 7.7 million openings forecast by economists. Job openings had been expected to decline slightly from the 7.8 million figure reported by the survey for October, and the unexpected increase triggered concerns that economic activity is still coming in hotter than expected. While more job openings can be considered a good thing in many respects, the report raised concerns about inflation. Additionally, U.S. Treasury bond yields have been rising. With inflationary concerns increasing somewhat and bond yields on the rise, the macroeconomic backdrop turned bearish for SoundHound AI and other growth stocks this week. Investors got another piece of bearish news on Wednesday with reports that President-elect Trump is considering declaring a national emergency in order to quickly roll out his desired tariff policy once he takes office. While expanded tariffs under the new Trump administration were already expected, the report triggered concerns that they could be larger and more expansive than previously anticipated. SoundHound AI stock has been on an incredible run. Even with a big pullback this week, the company's share price is up 615% over the last year. But concerns about the company's competitive positioning appear to be on the rise. SoundHound has emerged as an early leader in the conversational AI space, but this week's CES trade show has spotlighted new artificial intelligence offerings from Nvidia and other tech players. Trading at roughly 34 times this year's expected earnings, SoundHound AI has a highly growth-dependent valuation -- and its stock could face significant pressures if new players move in on its turf and curb its expansion opportunities. While it's not clear if the business will wind up be being disrupted, investors should be keeping a close eye on competitive developments in the space.

SoundHound AI Stock Rose Over 800% in 2024. Is It a Top Artificial Intelligence (AI) Stock for 2025? | The Motley Fool

After a stock rises 800% in one year, most investors are skeptical that it can have another great year. I don't blame anyone for having this mindset, as it's difficult for a stock to continue rising at that pace for a sustainable time frame. However, some of the tailwinds supporting SoundHound AI's (SOUN -9.63%) stock are undeniable, potentially making SoundHound an outlier. Even though it has risen more than 800% in the last year, some investors think that SoundHound is poised for more upside and will make a worthy investment even in 2025. SoundHound AI is obviously an artificial intelligence (AI) business, but its approach to AI and the fields it targets makes it a unique player in the space. Generative AI models require a prompt to trigger a response. Generative AI models like ChatGPT or Gemini require inputs in the form of text. However, SoundHound's focus is on responding to audio input. This isn't anything new. There have been attempts at digital assistants using audio inputs for over a decade now, whether those are in vehicles, a smart home device (Alexa), or a smartphone (Siri). However, you're likely left underwhelmed if you've used any of those products. SoundHound is looking to change that game, as many of the audio recognition technologies it implemented often outperform their human counterparts. SoundHound's technology impressed Nvidia enough that it has become an investor, which further validates its technology. SoundHound has worked with Nvidia to load its software on GPUs intended for vehicles, so it does not require internet connectivity to interface with an AI model. Automotive used to be a massive part of SoundHound's business, accounting for over 90% of revenue in Q3 2023. However, no single industry accounts for more than 25% of total revenue as of the third quarter of 2024, as other industries have started to adopt SoundHound's software. That's huge news, as the automotive market is large, but so are the restaurant, healthcare, insurance, and banking sectors. This Q3 report also contained promising news, like revenue increasing 89% year over year to $25 million, but that's not what got investors excited. In SoundHound AI's conference call, management made the bold projection that its revenue would double in 2025. Additionally, it expects to reach EBITDA profitability by the end of 2025, which is a key milestone in achieving net income profitability. These projections ignited a massive run-up in SoundHound AI's stock, but is it still worth buying? At the time of writing, the stock traded for 94 times sales. Due to this high valuation, SoundHound AI's stock is extremely volatile, so this price tag could easily change from day to day. Regardless, 94 times sales is unbelievably expensive. Most software companies trade between 10 and 20 times sales. But then again, most software companies aren't doubling their revenue from year to year. Should SoundHound double its revenue in 2025, this price tag would be cut in half if the stock price stays the same. That growth would still yield an expensive stock that trades at 47 times sales, and it's hard to imagine that the stock price is not moving at all. As a result, it's clear the market has baked in another significant revenue rise in 2026 (and perhaps 2027). However, SoundHound already has some of that growth on the books. Management used to highlight revenue backlog when it was just starting to grow as a way to convince investors that growth was on the horizon. Now that it has real growth, it doesn't need to spotlight it as much. But on SoundHound's Q3 confernce call, management was asked about it. Its response was eye-opening, stating that the revenue backlog is well north of $1 billion. With 2025's revenue projected to be between $155 million and $175 million, it's quite clear that SoundHound's sales could double after 2025. So, could SoundHound AI continue to rise in 2025? I'd say yes, but the company must report blowout figures each quarter. It has the business and backlog to do that, so it's not out of the question. However, with such high expectations already baked into SoundHound's stock, investors need to be careful and only invest what they are willing to lose with SoundHound, as the stock could get pummeled just as easily as it rose.

Why SoundHound AI Stock Is Crashing Today | The Motley Fool

SoundHound AI (SOUN -17.00%) stock is getting hit with big sell-offs in Wednesday's trading. The company's share price was down 14.4% at 11:15 a.m. ET amid a 0.1% decline for the S&P 500 index and a 0.3% pullback for the Nasdaq Composite index. The conversational artificial intelligence (AI) specialist's share price had been down as much as 17% earlier in the day's trading. SoundHound AI stock is losing ground in conjunction with bearish pressures facing the broader market as investors weigh economic risk factors related to President-elect Trump's proposed tariff policies. The company's share price is also getting hit hard as investors consider rising competitive pressures. According to reports, President-elect Trump is weighing the possibility of declaring a national emergency in order to implement sweeping new tariff policies once he comes into office. Trump is reportedly looking to use powers granted to the president through the International Economic Emergency Powers Act to rapidly introduce new tariffs in an attempt to rebalance global trade relationships. While the long-term impacts of such a move are unclear, the market is clearly not happy with the news. SoundHound AI and other stocks with speculative, growth-dependent valuations are being hit particularly hard as investors digest new macroeconomic risk factors and uncertainty. Thus far, SoundHound AI has had a clear forefront position in the conversational AI space. This distinction has helped the company's stock rocket higher, and its share price is still up 659% over the last year, even after a big recent pullback. But it seems the software specialist could soon face intensifying competitive pressures. Investors had been hoping that SoundHound AI would get a shout-out from Nvidia at its presentations at this year's Consumer Electronics Show (CES). Instead, new technologies from the AI leader have actually highlighted the competitive risks it faces. Nvidia and other large tech players are in the process of rolling out new agentic AI offerings, which essentially consist of trainable workers that can be adapted to perform a variety of tasks. Many of the large language models being built and trained to support new agentic AI tools will have support for voice-based interfaces, which might mean they could wind up quickly encroaching on SoundHound AI's turf. While strong sales growth and excitement surrounding its technologies have helped push the company's valuation up to roughly $5.7 billion, the conversational AI specialist is still a relatively small player in the broader tech field -- and it could face significant pressures from more resource-rich competitors.

Does the Valuation of SoundHound AI Stock Matter?

SoundHound AI (SOUN -9.63%) stock shot nearly 1,000% higher over the last year, with the largest portion of the gain occurring in November and December 2024. Its high-profile investors, client list, and innovation in so-called "next generation" artificial intelligence (AI) have made it popular among investors. Incredibly, its price-to-sales (P/S) ratio, which was just below 100 at the time of this writing, has not deterred investors despite being more than 30 times the S&P 500's average sales multiple of 3. Knowing this, you may be wondering whether the valuation matters with SoundHound AI. Why worry about valuation? Ultimately, investors care about valuation because they want to buy a stock at or below a fair price. Unfortunately for buyers, determining valuation involves both art and science, which can make this process difficult. In SoundHound AI's case, the art aspect of this question is heavily based on optimism about its future. Indeed, one could justify a case for valuation metrics not mattering under such conditions. Its relationships also stoke optimism about the company. Customers have taken to SoundHound's voice-driven AI products, and the company has adeptly landed high-profile clients including Mercedes-Benz, AeroMexico, Resorts World International, and many others. Additionally, an investment from Nvidia may help SoundHound maintain the funding needed to help it compete with its megacap peers. For those reasons, if the company truly has a long growth runway and the real numbers either match or exceed predictions, it is possible that SoundHound stock could eventually grow to the point that it justifies its stock price. Valuing SoundHound AI A more scientific approach is to value the stock based on its current metrics and minimize incorporating predictions for the future. Market cap, discounted cash flow models, and comparisons (such as the price-to-sales ratio) can offer valuation insights based on existing conditions. Unfortunately for SoundHound AI investors, the metrics highlight its significant overvaluation. Its current market cap of around $8 billion means SoundHound is approaching large-cap territory, a major accomplishment for what was a consistent small-cap stock as recently as October. Other metrics point to challenges. The discounted cash flow model offers little justification for a high valuation amid negative earnings. Negative earnings also leave SoundHound without a P/E ratio, meaning investors have to measure its valuation using other metrics. The aforementioned P/S ratio may seem like an obvious metric to choose. Still, with a sales multiple of nearly 100, SoundHound is likely ahead of its impressive revenue growth rate, which came to 75% yearly in the first nine months of 2024. In fact, so high is that valuation that the stock would have to maintain the same price and revenue growth rate for six years to get the sales multiple near the average level of 3. Such a difference might leave investors questioning whether they want to pay the stock's current price, let alone buy it in hopes that the increases continue. Does SoundHound AI's valuation matter? Under current conditions, investors should give SoundHound AI's valuation serious consideration before buying the stock. Admittedly, its technology has won it business from several high-profile clients and an investment from Nvidia. If its financials continue to grow rapidly for several years, it is still possible to earn a market-beating return on this stock. However, no matter a company's performance, a 75% revenue growth rate is difficult to maintain over a long time frame. Also, the market tends to punish stocks for slowing revenue increases. That means that if SoundHound AI begins to produce lower but still impressive growth numbers, the stock price could still tumble. Ultimately, SoundHound AI's next-generation technology is well-positioned to play a key role in the future of AI. However, since its valuation will likely matter, particularly in the foreseeable future, investors should probably move to the sidelines.

Beyond The Numbers: 6 Analysts Discuss SoundHound AI Stock - SoundHound AI (NASDAQ:SOUN)

In the preceding three months, 6 analysts have released ratings for SoundHound AI SOUN, presenting a wide array of perspectives from bullish to bearish. The following table encapsulates their recent ratings, offering a glimpse into the evolving sentiments over the past 30 days and comparing them to the preceding months. Bullish Somewhat Bullish Indifferent Somewhat Bearish Bearish Total Ratings 3 1 2 0 0 Last 30D 1 0 0 0 0 1M Ago 1 1 0 0 0 2M Ago 1 0 0 0 0 3M Ago 0 0 2 0 0 Analysts provide deeper insights through their assessments of 12-month price targets, revealing an average target of $16.0, a high estimate of $26.00, and a low estimate of $7.00. This current average has increased by 47.74% from the previous average price target of $10.83. Investigating Analyst Ratings: An Elaborate Study The standing of SoundHound AI among financial experts is revealed through an in-depth exploration of recent analyst actions. The summary below outlines key analysts, their recent evaluations, and adjustments to ratings and price targets. Analyst Analyst Firm Action Taken Rating Current Price Target Prior Price Target Scott Buck HC Wainwright & Co. Maintains Buy $26.00 $26.00 Scott Buck HC Wainwright & Co. Raises Buy $26.00 $8.00 Daniel Ives Wedbush Raises Outperform $22.00 $10.00 Scott Buck HC Wainwright & Co. Raises Buy $8.00 $7.00 Glenn Mattson Barclays Maintains Neutral $7.00 $7.00 Glenn Mattson Ladenburg Thalmann Maintains Neutral $7.00 $7.00 Key Insights: Action Taken: Responding to changing market dynamics and company performance, analysts update their recommendations. Whether they 'Maintain', 'Raise', or 'Lower' their stance, it signifies their response to recent developments related to SoundHound AI. This offers insight into analysts' perspectives on the current state of the company. Rating: Delving into assessments, analysts assign qualitative values, from 'Outperform' to 'Underperform'. These ratings communicate expectations for the relative performance of SoundHound AI compared to the broader market. Price Targets: Analysts explore the dynamics of price targets, providing estimates for the future value of SoundHound AI's stock. This examination reveals shifts in analysts' expectations over time. Understanding these analyst evaluations alongside key financial indicators can offer valuable insights into SoundHound AI's market standing. Stay informed and make well-considered decisions with our Ratings Table. Stay up to date on SoundHound AI analyst ratings. All You Need to Know About SoundHound AI SoundHound AI Inc is an innovator of conversational intelligence, offering an independent Voice AI platform that enables businesses across industries to deliver high-quality conversational experiences to customers. SoundHound AI: Delving into Financials Market Capitalization: With restricted market capitalization, the company is positioned below industry averages. This reflects a smaller scale relative to peers. Positive Revenue Trend: Examining SoundHound AI's financials over 3 months reveals a positive narrative. The company achieved a noteworthy revenue growth rate of 89.13% as of 30 September, 2024, showcasing a substantial increase in top-line earnings. In comparison to its industry peers, the company stands out with a growth rate higher than the average among peers in the Information Technology sector. Net Margin: SoundHound AI's net margin is below industry averages, indicating potential challenges in maintaining strong profitability. With a net margin of -86.68%, the company may face hurdles in effective cost management. Return on Equity (ROE): SoundHound AI's ROE is below industry averages, indicating potential challenges in efficiently utilizing equity capital. With an ROE of -8.37%, the company may face hurdles in achieving optimal financial returns. Return on Assets (ROA): SoundHound AI's ROA is below industry standards, pointing towards difficulties in efficiently utilizing assets. With an ROA of -5.68%, the company may encounter challenges in delivering satisfactory returns from its assets. Debt Management: SoundHound AI's debt-to-equity ratio is below industry norms, indicating a sound financial structure with a ratio of 0.15. Analyst Ratings: Simplified Benzinga tracks 150 analyst firms and reports on their stock expectations. Analysts typically arrive at their conclusions by predicting how much money a company will make in the future, usually the upcoming five years, and how risky or predictable that company's revenue streams are. Analysts attend company conference calls and meetings, research company financial statements, and communicate with insiders to publish their ratings on stocks. Analysts typically rate each stock once per quarter or whenever the company has a major update. Analysts may supplement their ratings with predictions for metrics like growth estimates, earnings, and revenue, offering investors a more comprehensive outlook. However, investors should be mindful that analysts, like any human, can have subjective perspectives influencing their forecasts. Breaking: Wall Street's Next Big Mover Benzinga's #1 analyst just identified a stock poised for explosive growth. This under-the-radar company could surge 200%+ as major market shifts unfold. Click here for urgent details. This article was generated by Benzinga's automated content engine and reviewed by an editor. SOUNSoundHound AI Inc$13.75-2.41%WatchlistOverviewMarket News and Data brought to you by Benzinga APIs

SoundHound AI Shares Are Falling Today: What's Going On? - SoundHound AI (NASDAQ:SOUN)

At CES 2025, SoundHound debuted its in-vehicle voice commerce platform, enabling hands-free food ordering through car infotainment systems. SoundHound AI Inc.'s SOUN shares are trading lower Wednesday potentially from continued momentum due to sector-wide challenges. What To Know: The broader tech selloff follows NVIDIA Inc.'s NVDA mixed reception at CES 2025 and rising treasury yields on Tuesday. NVIDIA introduced new AI technologies, including Cosmos foundation models, RTX 50 series chips and a desktop AI workstation. While these highlight innovation, skepticism about their immediate profitability may have caused NVIDIA's stock to be volatile, pressuring the tech sector including smaller AI-focused firms like SoundHound. Economic data may have also added to the decline. Job openings exceeded expectations, pushing treasury yields higher, with the 30-year yield hitting 4.90%. This environment increases borrowing costs for growth-oriented companies, further straining investor sentiment toward AI stocks like SoundHound. At CES, SoundHound showcased its new in-vehicle voice commerce platform, allowing drivers to place food orders hands-free via car infotainment systems. The system integrates with major restaurant brands and uses GPS for seamless pick-up coordination. The company plans to expand these features to banking, ticketing and other transactions in future iterations. This innovation underscores SoundHound's push for voice commerce adoption but has yet to counteract market pressures SOUN Price Action: SoundHound shares were down 16.7% at $14.98 at the time of writing, according to Benzinga Pro. Read Next: Pinterest Headwinds See BofA Lower Estimates, But Analyst Optimistic About AI Solutions Image Via Shutterstock. Market News and Data brought to you by Benzinga APIs

SoundHound AI Shares Drop Amid Sector Weakness: What's Going On - SoundHound AI (NASDAQ:SOUN)

ew AI, gaming, and automotive products from NVIDIA raised doubts about scalability, contributing to sector-wide stock declines. SoundHound AI, Inc. SOUN shares are trading lower on Tuesday as the broader tech sector declined. The drop followed economic data, rising treasury yields, and NVIDIA Corp's NVDA announcements at CES 2025. What To Know: At CES, NVIDIA unveiled its Cosmos foundation models, which generate synthetic data to train robots and autonomous vehicles, new RTX 50 series gaming chips, and its first desktop computer for AI development. While these announcements highlight advancements in AI and robotics, analysts potentially remain skeptical about their immediate commercial viability. NVIDIA's stock dropped over 4%, reflecting investor concerns about the scalability of emerging technologies, which may have impacted sentiment across the sector, including for SoundHound AI. The labor market data also added further pressure, with job openings exceeding expectations at 8.1 million in November. Strong hiring pushed Treasury yields higher, with the 30-year yield reaching 4.90%, increasing costs for tech firms reliant on borrowing for growth. Rising yields and NVIDIA's mixed reception at CES have created a challenging environment for AI companies like SoundHound to maintain investor confidence. Why It Matters: SoundHound's drop may reflect broader sector challenges, including competition from larger players like NVIDIA and economic conditions making it harder for growth-oriented companies to attract investor support. With increasing scrutiny regarding the profitability of AI technologies, the sector remains under pressure. SOUN Price Action: Soundhound shares were down 9.02% at $18.10 at the time of writing, according to Benzinga Pro. Read Next: Psychiatric Hospital Operator Acadia Healthcare Earns Upgrade Amid Expected Recovery In 2025 Image Via Shutterstock. SOUNSoundHound AI Inc$18.11-8.97%WatchlistOverviewNVDANVIDIA Corp$140.48-5.99%Market News and Data brought to you by Benzinga APIs

SoundHound AI: Don't Be Caught When The Bubble Bursts (Downgrade) (NASDAQ:SOUN)

Looking for a helping hand in the market? Members of Ultimate Growth Investing get exclusive ideas and guidance to navigate any climate. Learn More " As a growth and tech investor, I've written about many AI stocks over the past year, as it has probably become one of the most important (if not the most important) innovations of all time. Not only does it have the potential A Unique Price Action-based Growth Investing Service We believe price action is a leading indicator. We called the TSLA top in late 2021.We then picked TSLA's bottom in December 2022.We updated members that the NASDAQ had long-term bearish price action signals in November 2021.We told members that the S&P 500 likely bottomed in October 2022.Members navigated the turning points of the market confidently in our service.Members tuned out the noise in the financial media and focused on what really matters: Price Action. Sign up now for a Risk-Free 14-Day free trial! JR Research is an opportunistic investor. He was recognized by TipRanks as a Top Analyst. He was also recognized by Seeking Alpha as a "Top Analyst To Follow" for Technology, Software, and Internet, as well as for Growth and GARP. He identifies attractive risk/reward opportunities supported by robust price action to potentially generate alpha well above the S&P 500. He has also demonstrated outperformance with his picks. He focuses on identifying growth investing opportunities that present the most attractive risk/reward upside potential. His approach combines sharp price action analysis with fundamentals investing. He tends to avoid overhyped and overvalued stocks while capitalizing on battered stocks with significant upside recovery possibilities. He runs the investing group Ultimate Growth Investing which specializes in identifying high-potential opportunities across various sectors. He focuses on ideas that has strong growth potential and well-beaten contrarian plays, with an 18 to 24 month outlook for the thesis to play out. The group is designed for investors seeking to capitalize on growth stocks with robust fundamentals, buying momentum, and turnaround plays at highly attractive valuations. Learn more Analyst's Disclosure: I/we have a beneficial long position in the shares of NVDA either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Smart Money Is Betting Big In SOUN Options - SoundHound AI (NASDAQ:SOUN)

Deep-pocketed investors have adopted a bearish approach towards SoundHound AI SOUN, and it's something market players shouldn't ignore. Our tracking of public options records at Benzinga unveiled this significant move today. The identity of these investors remains unknown, but such a substantial move in SOUN usually suggests something big is about to happen. We gleaned this information from our observations today when Benzinga's options scanner highlighted 52 extraordinary options activities for SoundHound AI. This level of activity is out of the ordinary. The general mood among these heavyweight investors is divided, with 40% leaning bullish and 46% bearish. Among these notable options, 32 are puts, totaling $5,653,314, and 20 are calls, amounting to $1,938,820. What's The Price Target? Based on the trading activity, it appears that the significant investors are aiming for a price territory stretching from $4.0 to $25.0 for SoundHound AI over the recent three months. Volume & Open Interest Trends In terms of liquidity and interest, the mean open interest for SoundHound AI options trades today is 3069.4 with a total volume of 70,026.00. In the following chart, we are able to follow the development of volume and open interest of call and put options for SoundHound AI's big money trades within a strike price range of $4.0 to $25.0 over the last 30 days. SoundHound AI 30-Day Option Volume & Interest Snapshot Noteworthy Options Activity: Symbol PUT/CALL Trade Type Sentiment Exp. Date Ask Bid Price Strike Price Total Trade Price Open Interest Volume SOUN PUT SWEEP BEARISH 01/10/25 $3.7 $3.55 $3.7 $20.00 $924.2K 15.2K 9 SOUN CALL SWEEP BEARISH 07/18/25 $9.65 $9.5 $9.5 $8.00 $855.0K 1.5K 901 SOUN PUT SWEEP BEARISH 01/10/25 $3.4 $3.4 $3.4 $20.00 $850.0K 15.2K 4.1K SOUN PUT SWEEP BEARISH 02/21/25 $2.98 $2.97 $2.98 $16.00 $759.6K 1.9K 2.5K SOUN PUT TRADE BEARISH 01/10/25 $3.65 $3.5 $3.65 $20.00 $547.5K 15.2K 4.1K About SoundHound AI SoundHound AI Inc is an innovator of conversational intelligence, offering an independent Voice AI platform that enables businesses across industries to deliver high-quality conversational experiences to customers. Where Is SoundHound AI Standing Right Now? With a volume of 62,102,606, the price of SOUN is down -17.22% at $14.88. RSI indicators hint that the underlying stock may be approaching overbought. Next earnings are expected to be released in 50 days. Expert Opinions on SoundHound AI Over the past month, 2 industry analysts have shared their insights on this stock, proposing an average target price of $24.0. Unusual Options Activity Detected: Smart Money on the Move Benzinga Edge's Unusual Options board spots potential market movers before they happen. See what positions big money is taking on your favorite stocks. Click here for access. * Consistent in their evaluation, an analyst from HC Wainwright & Co. keeps a Buy rating on SoundHound AI with a target price of $26. * An analyst from Wedbush persists with their Outperform rating on SoundHound AI, maintaining a target price of $22. Trading options involves greater risks but also offers the potential for higher profits. Savvy traders mitigate these risks through ongoing education, strategic trade adjustments, utilizing various indicators, and staying attuned to market dynamics. Keep up with the latest options trades for SoundHound AI with Benzinga Pro for real-time alerts. Market News and Data brought to you by Benzinga APIs

Can This High-Flying Artificial Intelligence (AI) Stock Become the Next SoundHound AI in 2025? | The Motley Fool

SoundHound AI has been one of the best-performing stocks on the market in the past year, registering stunning gains of 936% as of this writing, thanks to a combination of factors. SoundHound took off big time in February last year after it emerged that artificial intelligence (AI) giant Nvidia has a small stake in the company. However, investors shouldn't forget that SoundHound has been clocking impressive growth quarter after quarter and has been gaining favor on Wall Street as well, contributing to the stock's rapid rise in the past year. But then, buying SoundHoundstock right now doesn't seem like a very smart move to make, considering that the voice AI solutions provider has a price-to-sales ratio of 94. However, there may be a cheaper alternative for investors who are looking for a small company that's making the most of the proliferation of AI and can become the next SoundHound: Ambarella (AMBA -4.94%). We will take a closer look at Ambarella's business and check how AI is turning out to be a solid growth driver for this little-known chipmaker. Ambarella designs chips that enable image and video processing in cameras that are primarily deployed in the automotive industry, along with Internet of Things (IoT) applications such as security cameras, drones, and wearable cameras, among others. The company points out that the growing adoption of AI-enabled use cases within vehicle cameras, as well as IoT applications, is boosting the demand for its system-on-chips (SoCs) that are capable of tackling AI workloads at the edge. Edge AI refers to the processing of data on devices locally without the need to upload or download that data to an AI server. The advantage of edge AI is that it enables real-time decision-making since the computing is done locally on a device, thereby reducing latency and enhancing security and privacy. The demand for edge AI is expected to jump significantly in the long run, since it can be deployed in multiple applications ranging from medical imaging to smart home appliances to traffic management to drones to robotics. This probably explains why Fortune Business Insights expects the global edge AI market to generate close to $270 billion in annual revenue in 2032 from $20 billion in 2023. Ambarella has set its sights on this market by developing AI computer vision chips that can be deployed in edge devices. The good part is that its AI-specific products are now driving tangible gains for the company. For its fiscal 2025's third-quarter (ended Oct. 31), Ambarella reported a terrific year-over-year increase of 63% in revenue to $82.7 million. CEO Fermi Wang pointed out on the company's earnings conference call that Ambarella "achieved record levels of AI revenue, which in turn contributed to a higher blended average selling price ("ASP")." The AI-driven contribution led to a massive acceleration in Ambarella's growth during the quarter, considering that the company's revenue for the first nine months of the fiscal year has increased at a much slower pace of 15% to $201 million. Even better, Ambarella reported non-GAAP (generally accepted accounting principles) earnings of $0.11 per share for fiscal third quarter, as compared to a loss of $0.28 per share in the year-ago period. So, the stronger ASP of the company's AI chips seems to be positively impacting the company's bottom-line performance. More importantly, Ambarella's guidance indicates that it is set to sustain its impressive growth in the current quarter. The company expects fiscal Q4 revenue to land at $78 million at the midpoint of its guidance range. That would be a 51% increase from the same quarter last year. The chipmaker's guidance suggests that it will end fiscal 2025 with a top line of $279 million (calculated by adding the revenue in the first nine months of the year to the fiscal Q4 guidance). That points toward a 23% increase in its top line from fiscal 2024 levels. Looking ahead, analysts are expecting Ambarella to deliver robust double-digit growth over the next couple of years as well. However, don't be surprised if the company delivers stronger growth than analysts' expectations. Ambarella is expecting AI to increase its addressable market nicely over the next three years. The company estimates that its serviceable addressable market at the end of 2024 stood at just over $5 billion. By 2027, that number is expected to jump to around $8 billion. What's more, Ambarella points out that its automotive revenue funnel for the next six years stands at approximately $2.2 billion. That includes $800 million worth of business that the company has already won from customers, with another $1.3 billion in the pipeline. Assuming it converts all of its pipeline into actual revenue, its annual automotive revenue run rate could be around $360 million for the next five years. That would be a big improvement over the fiscal 2024 automotive revenue of $77 million. Meanwhile, the additional opportunity in AI-enabled IoT devices could allow Ambarella to achieve stronger levels of revenue in the future. So, there is a possibility that Ambarella could continue to grow at a faster pace than Wall Street's expectations in the long run. That's why now may be a good time to buy Ambarella stock, even though it has clocked 33% gains in the past six months. The stock is trading at 12 times sales right now, making it significantly cheaper than SoundHound. What's worth noting here is that SoundHound's revenue was up 89% year over year in the third quarter of 2024. Ambarella's performance last quarter suggests that it has the ability to clock outstanding growth that could be rewarded with more gains on the market in the future, especially because of its solid pipeline and expanding addressable market.

Options Corner: Trade The Ride, Not The Direction Of SoundHound AI - SoundHound AI (NASDAQ:SOUN)

Statistical trends indicate that traders may have a better shot of playing the volatility game rather than a directional wager. While Nvidia Corp NVDA CEO Jensen Huang may be regarded as a hero within the broader technology ecosystem, the entrepreneur isn't attracting much love for his straight talk. With the practicality of innovations such as quantum computing potentially several years away, the blunt assessment triggered a sector-wide selloff, taking down conversational artificial intelligence specialist SoundHound AI SOUN. To be fair, Huang -- during Nvidia's analyst day -- expressed optimism about the future of quantum computing. Nevertheless, the executive mentioned that the innovation struggles with large data due to the underlying microwave-based communication. As such, he projected that practical applications may be 15 to 30 years away. See Also: Fed Minutes Reveal Inflation Jitters, Policymakers Signal Slower Interest Rate Easing Path Ahead Subsequently, such a timeline extends a competitive runway for SoundHound's rivals, which may have contributed to the volatility in SOUN stock. While SoundHound isn't directly tied to quantum computers, the general concern is that optimism for emerging technologies may have accelerated too quickly. On a financial note, there's also the matter of valuation. While SoundHound generally beats analysts' earnings expectations, the company continues to post losses. True, the tech specialist enjoys strong revenue growth. However, with shares priced at around 82 times sales, SoundHound stock commands an ultra-rich premium. As a prior Options Corner article alluded to, valuation doesn't matter -- until it does. Statistical Trends Urge Against A Directional Bet Despite the fallout in SoundHound stock, extreme value hunters may be tempted to buy the dip. Because experts agree that quantum computing and other advanced solutions have a bright future, it makes sense to be greedy during periods of extreme fear. However, the empirical data presents a more nuanced take. In the past 141 weeks, there have been 34 instances when SoundHound lost 10% of value or more within a one-week period (Monday's open to Friday's close). Out of this bucket, only 18 instances (or 52.94% of the time) resulted in SoundHound delivering a positive return four weeks out. Currently, trading activity indicates that SoundHound is on pace to post a loss between 20% to 30% for the business week ending Jan. 10. Statistically, 20% or worse weekly losses yield a 46.15% likelihood that the equity will be in positive territory four weeks out. For 30% or worse, the success ratio drops to 40%. Stated differently, there's no indication that traders buy extreme dips in SoundHound stock. Therefore, directional wagers are risky. That said, what is more certain is the magnitude of the response. Overall, whenever SoundHound suffers a weekly double-digit percentage loss, investors can expect an average positive return of 37.1% and an average loss of 25.8% four weeks out. For losses that specifically land between 20% and 30%, investors may expect an average positive return of 18.55% and an average loss of 24.32%. Charting Out a Long Iron Condor With such a wide range of potential pricing outcomes, astute traders may opt for a special multi-leg options strategy called the long iron condor. Structured as a combination of a bull call spread and bear put spread, the transaction speculates that the underlying security will see a rise in implied volatility. In other words, it doesn't matter where SOUN stock goes, so long as it hits either the upside or downside profitability target. In a long iron condor, the above targets are represented by the outermost strike prices (i.e. the lowest strike price represents the short strike target of the bear put spread and the highest strike price represents the short strike target of the bull call spread). Based on the empirical data mentioned earlier, traders may reasonably anticipate about a 25% decline in SoundHound stock four weeks from this Friday's close. For the positive scenario, the upside may range between 19% to 37%. Assuming a closing price of $15, SoundHound may land between $11.25 and $20.55 by the options chain expiring Feb. 7. If so, the 12P | 13P || 17C | 18C long iron condor (or the combo of the 12/13 bear put spread and 17/18 bull call spread) would be narrow enough to likely trigger a profitable outcome. However, the maximum payout for this trade presently sits at only 20%. Assuming a more robust positive response, aggressive traders may consider the 12P | 14P || 20C | 22C long iron condor, which bumps the max payout to 49%. However, wider condors are obviously less likely to trigger their profitability targets, making them increasingly speculative. Now Read: How Trump Could Impact China's Role In Emerging Greenland Mining Frontier Image: Shutterstock Market News and Data brought to you by Benzinga APIs