SoundHound AI Inc (SOUN)

SoundHound Ai (SOUN) stock experienced a pull back of 7.01%, in line with a broader market sell-off following a hotter-than-expected inflation reading for March.

• Broader Market Sell-off: The stock decline was part of a broader market sell-off driven by concerns about high inflation readings.
• Inflation Impact: The high inflation report makes it less likely that the Federal Reserve will lower interest rates later this year. High-priced, unprofitable, growth stocks like SoundHound AI are generally more sensitive to interest rates and inflation than the rest of the stock market.
• SoundHound AI's Sensitivity to Economic Conditions: The hotter-than-expected inflation report led to a broad stock market decline as investors speculated that the Federal Reserve would reduce its planned interest-rate cuts. Lower interest rates tend to favor growth stocks like SoundHound AI, as their valuations are based on future earnings. However, high inflation and interest rates could cool off, putting pressure on the stock.

SoundHound AI stock (SOUN) dropped by 15.76% due to a short report and a rare double downgrade by a Wall Street analyst, leading to negative investor sentiment.

• Short Report Details & Impact: A short report issued by Capybara Research titled "Lies, Damned Lies, and Cheeseburger 'AI'" suggested that SoundHound AI is a "failing company peddling lies and deception," setting a price target of $1. The report highlighted issues such as SoundHound's voice recognition technology being perceived as inferior to competitors like Amazon's Alexa or Apple's Siri, customer defections, and mounting losses with no clear path to profitability. One concerning point was that the company's backlog may be misleading, as SoundHound revised its definition to refer to potential revenue achievable, without any contractual obligation.
• Analyst Downgrade: Analysts at Cantor Fitzgerald issued a rare double downgrade on the stock to underweight (sell) from overweight (buy), setting a price target of $4.90, approximately 38% below Wednesday's closing price. They cited concerns about the valuation, the "opaqueness" of SoundHound's operating model, slowing growth, customer losses, and increasing competition from larger rivals.

SoundHound AI (SOUN) stock declined by 7.52%, the decline was part of a broader trend affecting high-profile artificial intelligence (AI) stocks, including Nvidia and Super Micro Computer.

• **Nvidia's GPU Technology Conference **: Nvidia's annual GPU Technology Conference (GTC) began today, prompting speculation among investors about potential announcements that could impact SoundHound and other AI stocks. Despite Nvidia's announcement of new GPUs, the company's share price fell roughly 1% in after-hours trading. This indicates that while the conference may have influenced trading activity, the actual announcements did not meet some investors' expectations.
• Impact on SOUN stock: While there was no specific news driving SoundHound's decline, the stock's movements were influenced by the performance and expectations of these AI leaders.

SoundHound AI (SOUN) stock plummeted by 18.67% following the release of its fourth-quarter earnings report, which failed to meet market expectations. The company reported a loss of $0.07 per share on revenue of $17.15 million, missing the average analyst estimate of a per-share loss of $0.06 on sales of $17.21 million.

• Q4 Performance: SoundHound AI showed strong momentum in Q4, with revenue increasing by 80.5% year over year. The company also reported that its cumulative subscriptions and bookings backlog had more than doubled to $661 million compared to the end of Q4 2022.
• Future Outlook: Looking ahead, SoundHound AI has laid out performance targets for 2024 and 2025. For the current fiscal year, the company expects revenue to be between $63 million and $77 million, representing a growth of approximately 52.5% compared to the previous year. In 2025, the company aims to achieve sales of more than $100 million, indicating a growth rate of roughly 43% compared to the midpoint revenue target for 2024.

Shares of Soundhound Ai Inc (SOUN) dropped by 5.33% from $1.69 to $1.60 in the trading on Wednesday, October 25, 2023. The reason why SOUN is down today is due to an analyst downgrade. Specifically, on the same day, Bank of America downgraded SOUN from Buy to Neutral and reduced its target price from $120 to $90. This downgrade likely raised concerns among investors regarding SOUN's financial performance and future outlook, which in turn triggered a sell-off of the stock.

Shares of Soundhound Ai Inc (SOUN) dropped by 6.32% from $1.90 to $1.78 in the trading on Wednesday, October 18, 2023. The reason why SOUN is down today is due to several factors affecting the overall market sentiment:

• Mixed Earnings Reports: Several major tech companies, including Microsoft and Alphabet (Google), reported mixed earnings results on October 17 and 18. These uncertain results raised concerns about the overall tech sector's performance, potentially impacting SOUN's stock.
• Rising Treasury Yields: In recent months, Treasury yields have been on the rise as investors anticipate continued interest rate hikes by the Federal Reserve to combat inflation. This trend made stocks less appealing to investors compared to bonds, potentially contributing to SOUN's decline.
• U.S. Government Restrictions on Chip Exports to China: On October 18, the U.S. government announced new restrictions on the export of advanced chips to China. These restrictions could have a detrimental impact on the semiconductor industry, including SOUN, as China serves as a significant market for semiconductors. This development likely added further downward pressure on SOUN's stock price.

Soundhound Ai Inc Stock (SOUN) dropped by 20.2% from $2.92 to $2.33 in the trading on Tuesday July 25, 2023. The reason why SOUN stock down today is due to a mixed shelf offering. SoundHound filed a three year shelf registration statement on Form S-3 for up to $400 million. The filing will enable efficient access to capital if the company needs additional liquidity over the next few years. SoundHound said it had approximately $130 million of total cash as of June 30 and noted that the filing does not obligate the company to raise additional capital.

Soundhound Ai Inc Stock (SOUN) dropped by 22.1% from $3.33 to $2.60 in the trading on Wednesday March 08, 2023. The reason why SOUN stock down today is due to lackluster guidance. The company guided to 2023 revenues of only $43.0 to $50.0 million. With the massive $332 million order backlog and the hype in the voice AI segment, one would expect financial forecasts for something vastly above consensus analyst estimates of $46.0 million for the year. The average analyst estimates has quarterly revenues only averaging $11.5 million for the year.