SoundHound AI’s stock price plummeted 8% on Tuesday as investors sold shares amid heightened market volatility. The company, which provides conversational artificial intelligence (AI) solutions, was down from its previous day highs and had fallen as much as 11% earlier in the session.
The sell-off came despite SoundHound’s unveiling of a new in-vehicle voice commerce platform at CES, which will allow users to order from restaurants directly through their vehicle’s infotainment system. The move was expected to generate significant buzz among investors, but it failed to impress, with no mention of the company by Nvidia CEO Jensen Huang during his keynote address.
SoundHound AI has been experiencing growth momentum, with sales increasing at an encouraging clip and management raising its midpoint sales growth target for 2024 to 82%. The company expects its sales growth to accelerate to more than double in 2025. However, this growth is highly dependent on the market and investors’ expectations, which may be a factor in the recent sell-off.
Despite the volatility, SoundHound AI has built a scalable platform with various use cases yet to be tapped. The company’s valuation of $6.8 billion at 41 times expected sales sets it up for potential downside pressures if growth expectations are not met or market conditions turn bearish. However, with its recent growth and opportunities ahead, the business remains a high-risk, high-reward play.
Source: https://www.fool.com/investing/2025/01/07/why-soundhound-ai-stock-is-plummeting-today