SoundHound AI (SOUN) Stock Trades Up, Here Is Why

What Happened?

Shares of voice AI technology company SoundHound AI (NASDAQ:SOUN) jumped 2.1% in the afternoon session after it received continued positive commentary from Wall Street analysts. 

The move follows several bullish actions, including DA Davidson analyst Gil Luria maintaining a "Strong Buy" rating and increasing the price target from $15 to $17 on September 10. Additionally, Wedbush's Daniel Ives reiterated a "Buy" rating on September 11. This optimistic analyst sentiment is supported by the company's strong performance, with a recent report noting that SoundHound AI's revenue tripled in the second quarter compared to the previous year. The company's voice AI platform has now surpassed 1 billion queries per month, positioning it to capitalize on the growing use of AI in devices, cars, and homes.

After the initial pop the shares cooled down to $14.37, up 1.8% from previous close.

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What Is The Market Telling Us

SoundHound AI’s shares are extremely volatile and have had 92 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 5 days ago when the stock dropped 4.9% on the news that markets pulled back, reversing early gains, as investor sentiment remained cautious despite a softer-than-expected inflation reading. 

Stocks rose in the morning session after an unexpected drop in the Producer Price Index (PPI) for August signaled easing inflation and raised expectations for a potential Federal Reserve interest rate cut. The U.S. Bureau of Labor Statistics reported that the PPI, which measures wholesale prices, edged down 0.1% last month, contrary to analyst expectations for a 0.3% rise. This data gives the Federal Reserve more flexibility to consider lowering interest rates to stimulate the economy.

SoundHound AI is down 28.7% since the beginning of the year, and at $14.37 per share, it is trading 40.7% below its 52-week high of $24.23 from December 2024. Investors who bought $1,000 worth of SoundHound AI’s shares at the IPO in April 2022 would now be looking at an investment worth $1,915.

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