SoundHound Stock Surges 9% on Demand for AI Tools

May 10

SoundHound (SOUN) AI shares surged over 14% in late trading on Thursday after the company surpassed analysts' first-quarter revenue estimates and raised its full-year sales outlook amid growing demand for artificial intelligence (AI) speech recognition software. The Silicon Valley-based tech company reported revenue of $11.6 million for the three-month period ending March 31, up 73% from the prior year's corresponding quarter and comfortably ahead of the $10.1 million expected by analysts. However, the company posted an net loss of $33 million, or 12 cents a share, wider than the 9 cents per share loss consensus view.

Looking ahead, the company bumped up the lower end of its full-year revenue guidance and now expects the top line to range between $65 million to $77 million, up from its prior forecast of $63 million to $77 million. Wall Street had modeled annual net sales tallying $69.5 million. CEO Keyvan Mohajer said in the company's earnings statement that "Our first quarter sets the tone for 2024 as another year of strong growth for SoundHound (SOUN)." The company already has a number of partnerships across restaurants and automobile sectors for its voice AI assistant tools.

Although SoundHound (SOUN) has a market capitalization of just $1.52 billion, it appeared on investors' radar this year after a regulatory filing revealed that AI chipmaker Nvidia (NVDA) had taken a stake in the company, holding 1.73 million shares as of the end of 2023.

Technical Outlook
SoundHound (SOUN) stock is up 9% in Friday's Market trading as of the time of writing with a Relative Strength Index (RSI) of 56 which is prime for further gains in the near term. The stock's daily price charts show a "Cup or U-shaped pattern" in the long term.