SoundHound (SOUN) stock price still has a 35% upside

By:
on Feb 16, 2024
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  • SoundHound share price has surged hard in the past few days.
  • It rose in a high-volume environment on Thursday after Nvidia’s investment.
  • The stock has more upside as AI investments continue.

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The SoundHound (NASDAQ: SOUN) stock price went vertical on Thursday as it formed its biggest up-gap on record. It surged by more than 60% and reached its highest point since July 5th of last year. The shares have now soared by over 152% from the lowest point in 2023, giving it a market cap of over $550 million.

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SoftBank and Nvidia investments

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SoundHound is one of the top AI companies listed in the United States. The company provides AI tools to both retail and corporate customers. Its most basic tool is a Shazam alternative that helps people to recognize music. 

SoundHound has also developed conversational features for most industries like automotive, hospitality, and contact centers, among others. For example, its restaurant tools make it possible for people to order in drive-throughs. 

This is a big market because there are over 200k drive-through restaurants in the US. These drive-throughs are now staffed with people whose wages are rising. As such, companies can buy the product, program it, and then replace these workers.

SoundHound is still a small company that is losing a lot of money. Its revenue in the most recent quarter came in at $13.13 million, higher than the $11.2 million it made in the same quarter in 2022. The revenue was also higher than the previous quarter’s $8.8 million.

It is also losing a lot of money as its net loss rose to over $20.2 million in the last quarter. The company has lost over $120 million in the past five quarters straight. 

SoundHound stock price went parabolic after receiving a big investment from SoftBank and Nvidia. It bought 1.1 million shares in the fourth quarter. Nvidia also invested in the company together with Arm and TuSimple. This is notable because Nvidia has become the biggest semiconductor company in the world with a market cap of almost $2 trillion.

SoundHound stock price forecast

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soundhound stock

SOUN chart by TradingView

On the daily chart above, we see that the HOUN share price bottomed at $1.5 in October last year. It then staged a strong comeback on Thursday in a high-volume environment. Data by Yahoo Finance shows that the volume rose to 296.3 million on Thursday, higher than the previous day’s 38.3 million.

As the stock jumped, it moved above the important resistance point at $2.42, its highest swing in November last year. It has remained above the 50-day and 100-day moving averages. 

Therefore, judging from the recent SMCI stock performance, we can assume that the shares will continue rising in the coming weeks. If this happens, the next point to watch will be at $5.11, its highest point on June 29th. This price is about 35% above the current level.

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