SoundHound AI: The Rising Star in Voice-Based Artificial Intelligence

Why SoundHound AI Stock Rocketed Higher Again Today | The Motley Fool

SoundHound AI (SOUN 12.60%) stock saw another day of explosive gains in Friday's trading. The conversational-AI company's share price closed the day up about 12.5%. While there wasn't any direct business news pushing SoundHound AI's stock higher today, the company's share price was gaining ground in conjunction with news from other corners of the artificial intelligence (AI) market. The software specialist is now up 600% across 2024's trading. Artificial intelligence stocks saw widespread bullish momentum today in conjunction with developments in the space. For starters, President-elect Donald Trump announced that he intends to appoint venture capitalist David Sacks as his administration's AI and crypto czar. The move signals that the incoming administration will likely make AI a key priority. Yesterday, OpenAI also announced the launch of its o1 reasoning model and a $200 monthly subscription for its new ChatGPT Pro service. SoundHound AI's in-car audio software platform features ChatGPT integration, and it's likely that new feature support from the AI leader will eventually will make it to the audio software specialist's auto offerings. More broadly, OpenAI's move to price its new ChatGPT software at $200 per month has investors feeling bullish about monetization opportunities in the AI space. Artificial intelligence has been the hot story in 2024, and no stock has been hotter than SoundHound AI. Its returns have outperformed all other big name AI stocks across the stretch, and gains have pushed the company's market capitalization to roughly $5.4 billion. Its also gotten more expensive. SoundHound AI stock is now valued at roughly 64 times this year's expected sales. While the company has been increasing its revenue at a rapid pace and still has big growth opportunities ahead, investors should understand that the company's highly growth-dependent valuation sets the stage for downside risk if growth misses expectations or macroeconomic and political conditions evolve in less favorable directions. If you're considering investing in SoundHound AI, utilizing a dollar-cost averaging approach through volatility could be the right move.

Prediction: This Will Be 2025's Top-Performing Artificial Intelligence (AI) Stock | The Motley Fool

Picking the top-performing artificial intelligence (AI) stock a year out isn't easy. In 2023, it ended up being Nvidia. In 2024, all signs are pointing toward Palantir Technologies. This shift from AI hardware to AI application software was predictable because it has to be deployed and become useful at some time for all of the investment dollars in hardware to pay off. As a result, I think we'll see another AI software company rise to the top in 2025. My prediction is that it will be SoundHound AI (SOUN 12.60%), even though it has already had an incredibly strong 2024, rising over 300%. So, how can a company that has already risen so much be a top pick for 2025? SoundHound AI's platform is centered around taking a voice input and turning it into a prompt for an AI platform. This has multiple uses, including automaking, restaurants, financial services, insurance, and healthcare. The company already has products serving those industries, and automakers and restaurants are some of its largest clients. Still, the company has become quite diversified in 2024. During last year's third quarter, 72% of revenue came from one client, and 90% of total revenue came from the automotive sector. Now, the largest client contributed only 12% of revenue, and the largest sector made up 25% of revenue. That diversification is a key part of SoundHound becoming more relevant in all industries and turning into a more stable company. If that single client left in late 2023, it might have caused the business to go belly up. If its largest client leaves now, it will still hurt, but not as much as it would have before. While SoundHound still has risks associated with it, this plays a huge part in lowering that risk level. In the third quarter, revenue grew 89% year over year to $25.1 million. This makes it a small-cap stock, as its revenue in the past 12 months totals $67 million. For other, more established software companies, that would be a fairly small percentage of overall revenue, but the company isn't expected to stay there for long. Management projects 2025 revenue will come in between $155 million and $175 million, which is nearly double the revenue it projects for 2024. Clearly, SoundHound expects its business to maintain its boom for 2025. This also highlights a key investment point: How high is the limit if its products become the industry standard in audio recognition? Think of all the ways we use voice to control what we do; now, imagine that being associated with the power of AI. SoundHound could become a huge winner in this space, even after it has run up so much. Perhaps the biggest risk with SoundHound is its valuation. Investors need to be aware of the success that's already baked into the stock's price. Its valuation tips the scales at around 40 times sales, which historically is very expensive. However, we also know that SoundHound's current trailing-12-month revenue is set to triple by the time 2025 ends (if management's projections come true), which would price the stock in a more reasonable valuation range -- somewhere around 20 times sales. The problem is that the stock must stay at the same price. If the company's business continues to boom, its stock isn't going to stay put. Although I'm excited about 2025, it's clear that all of that year's financial growth is already assumed in the stock price. As a result, if the business stumbles, the stock will take a nosedive. Still, I think there are hefty tailwinds blowing in SoundHound's favor, and I wouldn't be surprised if management ends up beating 2025 expectations, since it has raised its guidance multiple times in 2024 (that year's revenue was originally projected to be between $63 million and $77 million; current guidance is for $82 million to $85 million). If SoundHound AI forecasts that it will continue doubling its revenue in 2026, I think that would keep the hype going in the stock, and be enough to propel it to become the best-performing AI stock in 2025.

Why SoundHound AI Stock Skyrocketed 85% in November | The Motley Fool

Shares of voice assistant technology company SoundHound AI (SOUN 12.78%) skyrocketed 85.1% during November, according to data provided by S&P Global Market Intelligence. The company did report financial results for the third quarter of 2024 during the month. But oddly enough, this didn't serve as a catalyst to send the stock higher. To the contrary, the stock actually dropped following its Q3 report. In Q3, SoundHound's revenue soared by 89% year over year to a record $25 million. But acquisitions hit the company's profit margins. Its gross margin dropped to 49% compared to 73% in the prior-year period. Therefore, while revenue was skyrocketing, its gross profit was up a less impressive 26%. And its net loss actually widened. Immediately following the report, SoundHound stock dropped. But it was up sharply many of the other days that the market was open, as the chart below shows. There's reason to believe that as hype builds for artificial intelligence (AI), traders are piling into SoundHound stock to force it higher. This has been a common occurrence in recent years and explains why the stock rose for most of the month even though investors didn't appear to like the company's Q3 results. It's clear that SoundHound is becoming a polarizing investment, with short-sellers betting it goes down whereas traders are piling in to make it go up. But is there an actual business here to take notice of? Indeed there is. SoundHound makes voice assistant technology powered by AI and it has an impressive list of customers that includes Honda Motor, Chipotle Mexican Grill, and Block. And it importantly continues to add new customers, which is key in reducing risk for this small company. Consider that last year, its top five customers accounted for a whopping 90% of its business -- losing any of those customers would have been devastating. But thanks to new customer wins, its top five customers now only account for less than 33% of its business. That's huge. Winning so many important customers shows that SoundHound is a leader in this space. And that's important considering the market is estimated to be worth $140 billion. By comparison, SoundHound only expects $150 million in revenue next year, positioning it for robust long-term growth. A polarized investor community could lead to volatility with SoundHound stock. Anyone who buys shares today needs to have a long-term focus while being comfortable with short-term volatility. That said, trading at 46 times sales, I believe there's some room to be patient with SoundHound stock, especially considering how its margins have dropped. Management says that issue will correct as it integrates recent acquisitions into its business. For now, I would patiently watch to see if that's indeed the case before buying.

Should You Buy This Millionaire-Maker Stock Instead of Palantir? | The Motley Fool

Palantir (PLTR 6.22%) has become one of the hottest stocks on Wall Street. Its stock has shot up over 300% in 2024, making it one of the best-performing stocks in the market. As a result, many investors are wondering if this is the best AI stock to buy right now. However, I think there's a much more promising AI company out there, and it has far better growth than Palantir. SoundHound AI (SOUN 12.60%) is another stock often touted as a potential AI millionaire maker. But could it outperform Palantir? Let's take a look. For either of these two stocks to make you a millionaire by itself would require significant growth (although SoundHound would be more feasible). Let's start with an initial investment of $10,000. That would require each stock to rise by 100 times in value. If Palantir did that, it would be worth $15.9 trillion. For reference, the largest company in the world right now is Apple, which is valued at $3.67 trillion. SoundHound AI doesn't have as ridiculous of a path to becoming a millionaire maker, as it would need to be worth $375 billion to turn $10,000 into $1 million. So, a better way to look at these two investments is that they will grow faster than the broader market, accelerating your path to becoming a millionaire. But which one will do it better? Both Palantir and SoundHound AI are deeply involved in the AI game. Palantir builds application-specific programs for each business to deploy AI so that decision-makers can be armed with the most up-to-date information possible. It's also working to integrate generative AI into workflows, so AI isn't a product that's used on the side. SoundHound is centered around a different part of AI. Its software takes audio inputs and plugs them into AI models, allowing sectors like the automotive, restaurant, or financial services industries to automate tasks that humans traditionally do. As SoundHound is a much smaller company than Palantir, it's relatively early on its journey of implementing its software. However, it diversified its business significantly, and no single client makes up more than 12% of revenue, and its largest sector makes up 25%. SoundHound also has a key advantage over Palantir: It's growing much faster. In Q3, SoundHound's revenue grew 89% year over year to $25.1 million. It expects massive growth in 2025, with revenue expected to double from 2024's figure. Palantir is also doing well, but not nearly that well. In Q3, Palantir's revenue rose 30% year over year to $726 million. That means Palantir's revenue is nearly 30 times that of SoundHound's. However, it's not growing nearly as fast, and Wall Street analysts expect Palantir's revenue to rise around 24% next year. As companies get larger, it becomes harder to grow as fast, so it's not surprising to see the upstart exceeding Palantir's growth rate. However, there is one metric Palantir is beating SoundHound at, and it's not a good one. Every stock has its price, and the more hype and potential it has, the higher its valuation. When assessing both companies by the price-to-sales (P/S) ratio, it's clear both stocks are very highly valued. With Palantir trading at 64.5 times sales and SoundHound trading at 40.5 times sales, it's clear the market values these two businesses highly. Most might even consider them "overvalued." However, it is a real head-scratcher that Palantir is growing at a significantly slower rate than SoundHound, yet it trades at a 50% higher premium. If each company hits Wall Street's 2025 projections, SoundHound would trade for 20 times sales, and Palantir would trade at 47 times. While 20 times sales is probably a reasonable price to pay for SoundHound's stock, 46.5 is still far too high for Palantir. In the battle of these two AI stocks, SoundHound is by far the better option. However, it still has far more risk than many other stocks in the market, so investors need to be aware of that, too.

Is SoundHound AI a Millionaire-Maker Stock? | The Motley Fool

A tiny company in a fast-growing industry is a recipe for millionaire-making potential. And with shares up by a whopping 347% year to date as of this writing, SoundHound AI (SOUN -3.87%) has been a top performer as it seeks to pioneer voice-based artificial intelligence (AI). But is it too late for new investors to hop aboard? Let's dig deeper to see what the future holds. Analysts remain optimistic about the AI industry's long-term potential. Bloomberg believes the revenue opportunity could grow at a compound annual growth rate (GACR) of 42% to $1.3 trillion by 2032. This projection assumes that the capital expenditures being poured into AI training hardware will set the stage for the adoption of software solutions that make life easier for businesses and their consumers. SoundHound AI could play a role in this transition through its voice-AI platform, designed to allow clients to create conservational experiences for their users. The technology has clear applications in customer service, restaurant drive-thrus, and automotive assistants. And the company has inked agreements with major industry players like global automaker Stellantis, which will integrate SoundHound AI's voice assistant in several of its brands. Voice recognition software is nothing new. And SoundHound AI won't be the only company combining this technology with large language models (LLMs) behind platforms like ChatGPT. With that in mind, scaling up quickly could be the key to building an economic moat. As a larger company, SoundHound AI would likely have more client relationships and more data to improve its software. Arguably, the most important ingredient in a millionaire-maker stock is growth, and SoundHound AI has this in spades. Third-quarter revenue soared 89% year over year to $25.1 million as the company added new clients in the restaurant, healthcare, and finance industries. Acquisitions seem to be a big part of management's expansion strategy. And in the quarter, SoundHound AI closed the $80 million buyout of Amelia, the maker of a customizable AI agent for back-office tasks like employee onboarding. The deal gives SoundHound AI access to Amelia's clients, which include high-profile names like BNP Paribas, Teva Pharmaceuticals, and Fujitsu, and the deal could add $45 million of sales in 2025. That said, SoundHound AI is not without its challenges. Like many growth-oriented companies, it is far from profitability, with operating losses more than doubling to $33.7 million in the period. The good news is that, as a software-as-a-service (SaaS) provider, SoundHound AI's business model tends to have better margins than businesses that sell physical products. In the third quarter, the company generated a gross profit of $15 million (gross margin of 49%), giving it a pathway to scale into operating profitably by maintaining growth while keeping overhead costs (like advertising and research) under control. It also boasts $136.4 million in cash and equivalents on its balance sheet, allowing it to sustain its current cash burn for several more quarters without needing outside capital. SoundHound AI has two of the most important factors that give a stock multi-bagger potential: small size (with a market cap of $2.9 billion) and a huge addressable market. That said, the company's shares have already tripled this year, giving it a price-to-sales (P/S) multiple of 42. That's 13 times the S&P 500 average of 3.15.

Where Will SoundHound AI Be in 1 Year? | The Motley Fool

The rapidly expanding artificial intelligence (AI) market is fueling growth among many tech companies, and SoundHound AI's (SOUN 18.15%) strong position in voice-enabled products and services is benefiting from the trend. SoundHound's stock has soared more than 250% over the past 12 months (as of this writing), leaving some investors wondering where the company will be one year from now. So, let's take a closer look at what's happening with SoundHound and what investors might expect from the company in the coming year. SoundHound has successfully expanded its business lately, moving into new conversational AI markets and boasting more than 200 enterprise brands using its tech, including Chipotle Mexican Grill, Qualcomm, and Stellantis' automotive brands. The popularity of its voice AI platform is evident from the company's third quarter (which ended Sept. 30) results, in which revenue rose 89% from the year-ago quarter to $25.1 million, outpacing analysts' consensus estimate of $23 million. SoundHound's non-GAAP loss per share of $0.04 was an improvement from a loss of $0.06 in the year-ago quarter and ahead of Wall Street's expectation of a loss of $0.08. Not only were the company's third-quarter results solid, but SoundHound's revenue growth is likely to continue. Management recently issued 2024 revenue guidance of $83.5 million for the full 2024 year at the midpoint and then increased to $165 million in 2025. That represents substantial year-over-year sales growth for the company and outpaces analysts' consensus estimate of $152.1 million in revenue for 2025. SoundHound is already successfully tapping into the AI market, and its momentum comes as large companies ramp up their AI spending. According to SoundHound's management, companies will invest an estimated $175 billion to $250 billion in AI enterprise spending by 2027. This could provide SoundHound with new growth opportunities over the coming year and beyond. The company just closed on its acquisition of Amelia, giving it more avenues for conversational AI growth in finance, healthcare, and insurance that haven't been tapped fully into. But there are two things investors should be cautious about with SoundHound right now. The first is that the company isn't profitable. The company's losses narrowed in the third quarter, and analysts estimate the company's loss per share will continue to improve from $0.38 in 2024 to $0.27 in 2025. That's good news, but it'll take time for the company to reach profitability. More importantly, SoundHound's stock is relatively expensive right now. The company's shares trade at a price-to-sales ratio of 35.9, which is far above the S&P 500's average of about 3.1. That doesn't mean SoundHound's stock doesn't have more room to run, but some of the company's future benefits from an expanding AI market are likely baked into its current share price. So, if you're bullish on the company's long-term opportunity, adding a small position now and buying more shares if there's a pullback in the stock price might be a good strategy.

SoundHound AI Stock Up 564% YTD: Can Bullish Streak Keep Playing? - SoundHound AI (NASDAQ:SOUN)

SoundHound's RSI of 82.74 suggests overbought conditions, but investor optimism remains strong amid AI growth. SoundHound AI Inc SOUN has been stealing the show in the stock market with a jaw-dropping 564% gain year-to-date. The stock's trajectory has been up, fueled by optimism over its voice AI technology. But is the rally sustainable, or is this just a short-term hit? SoundHound Sounding Bullish Signals Across The Board Chart created using Benzinga Pro The technical indicators for SoundHound paint a strongly bullish picture: Key Moving Averages: SoundHound stock trades well above its eight, 20-, 50- and 200-day simple moving averages. MACD Momentum: The Moving Average Convergence Divergence (MACD) indicator is at 1.56, signaling strong bullish momentum. RSI Overbought: With a Relative Strength Index (RSI) of 82.74, the stock is technically overbought, but that hasn't slowed its climb. Even with its overbought status, investor sentiment remains solid, reflecting a belief in the company's long-term prospects. Read Also: Jim Cramer Makes Ralph Lauren Prediction, SoundHound AI Finally 'Broke Out' SoundHound Growth Story In Numbers SoundHound's stock has been on fire in the past month alone, with gains of over 142%. The past five days have been equally impressive, delivering a 50% rally. These short-term bursts suggest heightened buying activity, supported by the company's steady stream of positive developments. Despite the steep run-up, the 200-day moving average of $5.37 indicates that the long-term trend is intact, and the stock may still have room to grow. What's Driving The SOUN Stock Rally? Investors are betting big on SoundHound's dominance in the voice AI space. The recent deployment of its Smart Ordering system at Torchy's Tacos and its presence in over 10,000 global locations underscore its leadership in the sector. As voice AI adoption accelerates, SoundHound could be well-positioned to capture a significant market share. What To Watch Next With the stock surging, the biggest question is whether SoundHound can maintain this momentum. RSI levels suggest a pullback could be on the horizon, but the bullish technical signals hint at further upside potential. Investors should watch for upcoming announcements or earnings updates that could serve as catalysts for the next leg of this rally. SoundHound AI is hitting all the right notes, and the market seems eager to keep listening. Read Next: Google Mafia Dominates Tech's New AI Frontier As Alphabet Alumni Raise $15B Photo: Shutterstock Market News and Data brought to you by Benzinga APIs

Better Artificial Intelligence Stock: SoundHound vs. Palantir | The Motley Fool

Artificial intelligence (AI) is the hottest investment theme on the planet right now. And for good reason. AI could be revolutionary for everything from business to our daily lives. For example, AI can make cars safer or save pharmaceutical companies time in the development of drugs. And these transformations, as they improve efficiency and products and services, could lead to significant earnings growth for companies using or developing AI tools. As a result, investors who get in early on these future AI leaders also may score a big win -- possibly in the near term and most importantly down the road. The key is picking the right AI stocks today to offer yourself the best chance of big returns over time. Two AI stocks that already have soared more than 200% this year look like they still could offer upside over the long term because both are in the early days of their growth story. I'm talking about SoundHound AI (SOUN 18.15%) and Palantir Technologies (PLTR 0.47%). But if you could only buy one, which makes the best to get into today? Let's find out. SoundHound is a specialist in voice AI such as a voice AI assistant you may find in a car or at a restaurant to take your drive-thru order. Though many companies operate in this field, SoundHound's technology -- protected by hundreds of patents -- sets it apart. Unlike the traditional method of understanding that involves translating voice to text and then to meaning, SoundHound immediately translates speech to meaning. This results in speed and improved accuracy. The voice technology company has seen revenue soar in recent times; it climbed 89% in the latest quarter and prompted SoundHound to increase its outlook. Earlier, the company said annual 2024 revenue would surpass $80 million, and now SoundHound says it will be in the range of $82 million to $85 million. Importantly, the company has made progress on diversifying its revenue sources. For example, five sectors now each contribute 5% to 25% to revenue compared with autos contributing 90% only a year ago. SoundHound's total addressable market tops $140 billion, offering this company plenty of room for new customer acquisition and revenue growth, especially as it expands across industries such as financial services, retail, and healthcare. So, it's fair to say that, though growth has been impressive so far, this may be just the beginning. Throughout most of Palantir's 20-year history, it was generally associated with government contracts. Governments used Palantir's software platform to aggregate their data and make better use of it. But in recent times, thanks to the AI boom and Palantir's introduction of its Artificial Intelligence Platform (AIP) last year, demand from commercial customers has taken off, and that's helped Palantir's growth and share price to soar. AIP helps both governments and commercial customers turn their data into smart decisions and better projects, and Palantir has called demand for this system "unrelenting." Today, Palantir is posting double-digit growth from both its government and commercial businesses, and in the most recent quarter, it reported its biggest profit ever. The company's revenue growth rate has advanced over the past six quarters from 13% at the start of that period to 30% in the most recent quarter. Another example of Palantir's rapid growth: The company had only 14 U.S. commercial customers four years ago and today has nearly 300. Finally, to further illustrate the strength of this tech company, the S&P 500 recently invited it to join, showing that it's one of the companies powering today's economy. As mentioned, both of these stocks have soared this year, leaving valuations high. SoundHound isn't yet profitable, so we can look at its price-to-sales ratio -- and here it trades for 34 times forward sales estimates. Palantir is profitable, so we can consider its forward price-to-earnings ratio -- and right now the stock trades for more than 170 times forward earnings estimates. Since both companies are in the early days of their AI growth stories, these measures looking at near-term sales and earnings, may not present the full long-term story. So, if the company as a whole looks solid and earnings prospects seem promising, it's worth considering these stocks in spite of their current valuations. Which one makes the best choice now? I would go for Palantir since it's already profitable and at the same time still has plenty of room for revenue growth ahead. The company just launched AIP a year ago, commercial client growth is solid, and there's so much opportunity to make gains in this commercial market in the coming years considering the number of commercial customers Palantir has today. So, both of these stocks could win over time, but Palantir makes the better buy right now.

Nvidia Bought 6 Artificial Intelligence (AI) Stocks, but This 1 Has Soared the Most | The Motley Fool

Nvidia (NASDAQ: NVDA) is one of the world's largest companies. Its market capitalization stands at $3.3 trillion as of this writing, with $3 trillion of that value added in the last two years alone. Nvidia's graphics processing units (GPUs) for the data center are the gold standard for developing artificial intelligence (AI) models, and they are the main proponent behind the company's incredible growth. Over the past year, CEO Jensen Huang has spread some of Nvidia's good fortune by investing in other AI stocks. Nvidia started investing in AI stocks at the end of 2023. According to its latest 13-F filing with the Securities and Exchange Commission, which was released a few weeks ago, it now owns six of them: Arm Holdings received the largest investment, with Nvidia's position worth $280 million at the end of the third quarter of 2024 (ended Sept. 30). That represents over half of the value of Nvidia's entire portfolio. Arm stock is up around 77% since Nvidia bought it, but that doesn't hold a candle to the 271% return generated by SoundHound AI. Nvidia's position in SoundHound is relatively small, with a value of just $13.6 million based on its current stock price of $7.88, but that clearly hasn't stopped investors from rushing to buy it. So, is it too late to follow Nvidia's lead? Most popular generative AI chatbot applications perform best when users input text-based prompts, but SoundHound is a leader in conversational AI, which can understand voice prompts and respond in kind. SoundHound's software is primarily used in the automotive, hospitality, and quick-service restaurant industries. However, it acquired Amelia a few months ago, which is another company specializing in conversational AI. It helps organizations create AI-powered virtual agents to serve their customers and employees, and the deal is helping SoundHound expand into other industries like financial services, insurance, healthcare, and more. Automotive giants like Mercedes-Benz and Stellantis (home to Jeep, Dodge, and Chrysler) are two top customers of SoundHound's software. Its Chat AI product allows those brands to install an AI voice assistant in their vehicles, so drivers can instantly request information on the weather, the stock market, and even the status of their flight on the way to the airport. Drivers can also say goodbye to physical instruction manuals because SoundHound's Vehicle Intelligence software knows everything about the features and functions in their car, and they can request it at any moment. In the restaurant industry, popular chains like Chipotle, Krispy Kreme, and Papa John's use SoundHound's software. The company offers an AI ordering system that can be used to accept phone orders, in-store orders, and even drive-thru orders without human intervention. It also developed a product called Employee Assist, which workers can call upon at any time if they need information about store policies or menu items. SoundHound generated a record $25.1 million in revenue during the third quarter of 2024, which was a whopping 89% increase from the year-ago period. SoundHound included some of Amelia's revenue for the first time, which helped drive that growth. The acquisition added other benefits like customer diversification; 90% of SoundHound's revenue came from the automotive industry in the third quarter of last year, whereas it now has six different industries accounting for between 5% and 25% of its total revenue. That's one of the main reasons SoundHound just significantly increased its guidance for 2024 and 2025. It now expects to deliver between $82 million and $85 million this year (compared to its previous forecast of $80 million), which would be an 82% increase compared to 2023 at the midpoint of the range. The company then expects to generate between $155 million and $175 million in revenue in 2025 (compared to its previous forecast of $150 million), which points to accelerated growth of 97% at the midpoint of the range. But it gets better. SoundHound told investors it has an order backlog of more than $1 billion, which it expects to convert into revenue over the next six years. SoundHound is losing quite a bit of money. It burned through $21.7 million on a generally accepted accounting principles (GAAP) basis during the third quarter (remember, that was on just $25.1 million in revenue). The company only has $136 million in cash on hand, so it can't afford to lose money at this pace for very long. In fact, SoundHound recently announced a new at-the-market equity facility that will allow it to raise an additional $120 million by issuing more stock. It will help secure the company's future, but it will also dilute existing shareholders, which could translate into losses for investors who buy the stock today. Based on SoundHound's trailing-12-month revenue and its current market capitalization of $3.2 billion, its stock trades at a price-to-sales (P/S) ratio of 37.5. That makes it even more expensive than Nvidia! That doesn't make a whole lot of sense, considering that Nvidia has a decades-long track record of success, plus a fortress balance sheet, surging financial results, and the best AI chips in the world: SoundHound's revenue forecast for 2025 makes the stock appear much cheaper on a forward basis. However, it's still a very speculative way to invest in the AI industry, so it's important to only put in money you can afford to lose. After all, Nvidia is a $3.3 trillion company, so it probably isn't concerned about losing the $13.6 million it currently has invested in SoundHound stock if things don't work out.

Is SoundHound AI a Buy Now? | The Motley Fool

Tempted to invest in SoundHound AI stock after its recent price surge? Find out why you might want to watch this tempting AI stock from the sidelines until the overheated share price cools off. SoundHound AI (SOUN -0.78%) is an unusual beast. The company is a solid artificial intelligence (AI) expert with fantastic business prospects over the long haul. The stock is a volatile plaything for get-rich-quick speculators on social media and Reddit (RDDT 5.78%) forums. So SoundHound AI's stock gained 78% between the end of October and the closing bell on December 2. I love the company and expect it to soar for years to come -- but I would not recommend buying it at these extremely lofty prices. Let me explain. This AI veteran's long-term future looks incredibly bright. SoundHound AI has built an unparalleled voice recognition system after decades of AI-based audio analysis. The company serves a wide variety of sectors, from in-car voice controls to automated drive-through ordering systems and phone-based menus. Management estimates the addressable market to be worth more than $140 of annual revenues, and SoundHound AI has many rivals but few technology equals. The customer list includes household names like Chrysler/Dodge/Jeep parent Stellantis (STLA 1.13%), consumer electronics giant LG, and the Chipotle Mexican Grill (CMG 0.66%) restaurant empire. The roster grows quarter by quarter, making large strides when SoundHound AI acquires smaller AI software developers with firmly established customer relationships. Quarterly revenues jumped from the $15 million range in recent quarters to more than $25 million in the third quarter of 2024. Management projects more than $150 million in 2025 sales, or nearly $38 million per quarter next year. That radical growth is supported by a massive and surging backlog of long-term contracts, amounting to $723 million in the second quarter and "in excess of $1 billion" three months later, including the agreements included in the recent buyout of enterprise software maker Amelia. The backlog will convert into cash-based revenues as the contracts are executed, with an average term of about six years per deal. So SoundHound AI stands on solid ground, chasing some impressive long-term goals. The stock is popular for robust reasons. At the same time, SoundHound AI's stock price is artificially inflated by treasure-seeking meme stock enthusiasts. Egged on by social media influencers on Reddit, X, and other channels, lots of small investors have been buying SoundHound AI stock at rapidly rising prices over the last month. The idea is to break the stock market system, forcing a large group of short-sellers to cover their pessimistic best and unleashing a furious share price surge. So-called short-squeeze events can be spectacular, and SoundHound AI was an easy target with limited daily trading volume and more than 20% of the shares involved in short-selling bets. By timing this chart action just right, SoundHound AI's meme stock fans hope to convert their stock holdings into cash at just the right moment, before the short-squeeze spike fades out and the stock falls back to more reasonable prices. The attempted short-squeeze push is running out of steam. SoundHound AI's trading volume remains high and the share price is way up, but the Reddit chatter has started to slow down and short-seller interest actually increased in November. The trading volume comes and goes. One of these days, I expect this mini-bubble to pop. When it does, the vast majority of speculating SoundHound AI buyers will miss the opportunity to monetize their paper gains. Even with stop losses and other defensive tactics in place, the sudden drop will leave many shareholders deeply underwater. That's just the way sudden price spikes tend to work out in the real world. I might be tempted to double down on my SoundHound AI investment after that sharp price correction. As I said, this is a fine company with stellar long-term growth prospects, and I will almost certainly buy more of it when the price is right. But the price is nowhere near "right" at the moment, unless the stock dropped before this modest article worked its way through the publishing process. I highly recommend holding on to the SoundHound AI shares you already own while preparing to pounce on a lower-priced version of the same great stock. Time in the market beats timing the market, especially when the complex interplay of meme stock investors and short-sellers dictates the price action.

Why SoundHound AI Stock Is Skyrocketing Today | The Motley Fool

SoundHound AI (SOUN 28.37%) stock is surging in Thursday's trading. The conversational artificial intelligence (AI) company's share price was up 30.1% as of 1 p.m. ET. As of this writing, the S&P 500 index was flat, and the Nasdaq Composite index was up 0.2%. SoundHound AI's valuation is surging today following news that the company's AI ordering and customer service technologies are being rolled out at Torchy's Tacos. The stock is now up 157% over the last month. SoundHound published a press release today announcing that its AI Smart Ordering service had gone live at Torchy's Tacos. The service has been adopted at all 130 of the company's restaurant locations. SoundHound's conversational AI software has been trained on the Torchy's menu and has the capacity to manage 100% of the restaurant's incoming calls and handle questions about menu items, specials, store hours, and allergen information. In turn, the utilization of the AI software will allow Torchy's staff to focus on food preparation and providing in-store service. While today's explosive gains for SoundHound AI stock were spurred by the announcement of the rollout of services at Torchy's Tacos, there's a foundational element that could be playing an even greater role in the share price gains. SoundHound AI has gained favor as a meme stock, and its share price has frequently seen big shifts on little or no relevant news. Landing a new contract at Torchy's is certainly a bullish development, and increasing adoption highlights the value and potential of SoundHound's software. On the other hand, bridging its conversational AI ordering software to 130 new restaurant locations is not the kind of announcement that would normally be expected to power such explosive share price gains. While the stock could continue rocketing higher on meme-powered momentum, the recent gains raise some significant valuation concerns -- and there's a good chance the stock will be highly volatile in the near term.

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

Q3 revenue grew 89% year-over-year, beating expectations, with the company raising its 2024 and 2025 revenue outlooks amid growing market. SoundHound AI Inc. SOUN shares are trading higher Wednesday. The stock gained nearly 100% over the past month, driven by developments in its technology deployment, increased market enthusiasm for conversational AI and improved financial performance. Here's what you need to know. What To Know: On Nov. 22, SoundHound announced the successful deployment of its conversational AI agent, Amelia, at Apivia Courtage, part of France's AEMA Group. The AI system handled over 100,000 customer calls in 2024, reducing the volume of human-managed inquiries by nearly 20%. The project aimed to improve operational efficiency and allowed employees to focus on higher-value tasks. In a separate announcement earlier on Nov.14, SoundHound highlighted its long-term partnership with Kia, which includes the integration of its voice AI technology in Kia vehicles in India. The system supports Hindi as a featured language, with plans to add 10 additional regional languages. This move reflects the company's expansion into localized, high-demand markets. SoundHound also reported strong third-quarter earnings at the beginning of November. Revenue increased 89% year-over-year to $25.1 million, beating analyst expectations of $23.02 million. The company also raised its full-year revenue outlook for 2024 and 2025, projecting $82-$85 million in 2024 and $155-$175 million in 2025. Short interest in SoundHound remains high, with 24.05% of its float sold short. Despite this, the stock has seen significant upward momentum, supported by strong performance metrics and investor optimism about the role of voice AI in emerging markets. SoundHound executives are set to participate in upcoming investor conferences in December, which could provide further insights into the company's growth strategy. The stock's recent performance potentially indicates continued interest from both retail and institutional investors. SOUN Price Action: SoundHound AI shares closed Wednesday up 14.30% at $10.15, according to Benzinga Pro. Read Next: PS VR2 Gets Controller-Free Hand Tracking Feature Photo: Shutterstock. SOUNSoundHound AI Inc$10.1113.8%WatchlistOverviewMarket News and Data brought to you by Benzinga APIs

Got $5,000? 1 Tech Stock to Buy and Hold for the Long Term. | The Motley Fool

It's tempting to actively trade small tech companies in their early days. The companies' stock prices typically experience wild swings as investors grapple with proper valuations and long-term opportunities. However, it's often better to designate a small portion of your portfolio to a speculative name and hold the stock for the long haul. For instance, if you bought $5,000 worth of an upstart online bookseller at its initial public offering, you would have over $10 million today. I'm talking about Amazon, of course. No one knew back then that the company would grow to dominate online retail and be the largest cloud services provider. In fact, there was no such thing as the cloud back then. There were also dozens of companies that did not pan out, so it's crucial not to put all your eggs in one basket and not designate too much money to speculative names. But when they hit, these stocks supercharge investment gains. SoundHound AI (SOUN -3.87%) is a company with massive potential (and a fair amount of risk) for long-term success. Here's why. Conversational interactive voice-recognition technology is coming soon to a drive-thru near year. Companies will also implement this in fast-casual restaurants, quick-stop retail, and vehicles. A growing number of businesses are adding and experimenting with this tech, with many using SoundHound's technology. Here are the brands that have partnered with the company already: The potential for gigantic savings for companies that use AI to automate customer service will compel businesses to implement this technology. Much like paying at the pump and self-checkout lanes, this automated ordering will be the standard in the near future, I firmly believe. Statista estimates that the speech recognition market will double by the end of the decade, as you can see below. The automotive market is another tremendous opportunity for voice-recognition tech. Many vehicles can now understand limited commands, such as "Call mom" or "Play music." Soon, more-complex requests such as, "What is the highest-rated restaurant within 10 miles that serves hamburgers?" will be possible. SoundHound believes its total addressable market from all verticles could reach $140 billion, so capturing even a small portion of this would make the company successful. The company reported an 89% year-over-year rise in revenue to $25 million in the third quarter. Best of all, the revenue concentration from its largest customer dropped from 72% to just 12%. A high concentration is dangerous because losing that one customer would be devastating, so this gigantic reduction is terrific news. Revenue for 2024 is forecast to reach at least $82 million, followed by $155 million to $175 million in 2025. The midpoint of the 2025 guidance would be a 100% increase. The stock trades at 36 times sales right now, which is quite expensive. But this drops to 18 times sales at next year's guidance midpoint and will continue to fall substantially if the rapid growth continues. SoundHound is on solid financial footing, with $181 million in current assets against $70 million in current liabilities (those payable within one year). This will allow the company to invest in growth and fund operations for now. SoundHound also has long-term liabilities, such as $40 million in long-term debt due in June of 2026 and a $74 million liability related to an acquisition contingent on specific performance metrics. However, the company is not profitable or reporting positive cash flow from operations yet, so management must soon translate the stellar revenue growth into positive cash flow. Because of this, SoundHound stock isn't for everyone. (Take The Motley Fool's risk tolerance quiz here.) It's riskier than established profitable companies but has gigantic potential upside. That's why it's worth a modest, long-term position.