What Happened?
A number of stocks jumped in the afternoon session after a share sale catapulted OpenAI to a staggering $500 billion valuation, making it the world's most valuable startup and fueling broad optimism for artificial intelligence.
The deal involved current and former employees selling approximately $6.6 billion in stock to investors, including Thrive Capital and SoftBank. This landmark valuation is having a ripple effect across the market, bolstering investor confidence in the entire AI ecosystem. The enthusiasm has helped propel the tech-heavy Nasdaq 100 and the broader S&P 500 to record highs, as investors increasingly see the technology sector as the primary driver of market growth.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Advertising Software company The Trade Desk (NASDAQ: TTD) jumped 3.3%. Is now the time to buy The Trade Desk? Access our full analysis report here, it’s free.
- Developer Operations company GitLab (NASDAQ: GTLB) jumped 3.9%. Is now the time to buy GitLab? Access our full analysis report here, it’s free.
- Automation Software company SoundHound AI (NASDAQ: SOUN) jumped 11.4%. Is now the time to buy SoundHound AI? Access our full analysis report here, it’s free.
- Identity Management company Okta (NASDAQ: OKTA) jumped 3.5%. Is now the time to buy Okta? Access our full analysis report here, it’s free.
- Compliance Software company Workiva (NYSE: WK) jumped 3.3%. Is now the time to buy Workiva? Access our full analysis report here, it’s free.
Zooming In On SoundHound AI (SOUN)
SoundHound AI’s shares are extremely volatile and have had 94 moves greater than 5% over the last year. But moves this big are rare even for SoundHound AI and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 7 days ago when the stock dropped 4.4% as reports surfaced of significant stock sales by key company executives. Specifically, Chief Financial Officer Nitesh Sharan sold over 126,000 shares for approximately $2.1 million, and Vice President of Engineering Majid Emami sold over 78,000 shares, realizing about $1.32 million from the transactions.
SoundHound AI is down 11.7% since the beginning of the year, and at $17.81 per share, it is trading 26.5% 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 $2,374.
Do you want to know what moves the business you care about? Add them to your StockStory watchlist and every time a stock significantly moves, we provide you with a timely explanation straight to your inbox. It’s free and will only take you a second.
