What Happened?
Shares of voice AI technology company SoundHound AI (NASDAQ: SOUN) jumped 2.7% in the morning session after analysts from Cantor Fitzgerald and Mizuho Securities upgraded the stock to a "Buy" rating.
Both firms also raised their price targets for the company to $15. The analyst from Cantor Fitzgerald cited SoundHound AI's strong execution, particularly its success in selling additional and more advanced voice and conversational AI solutions to existing customers. The note also pointed to the upcoming Consumer Electronics Show in early January 2026 as a potential positive event for the stock. This sentiment was echoed more broadly, as the stock held a "Moderate Buy" consensus rating, and the average price target from analysts suggested a significant potential upside from its price at the time.
After the initial pop the shares cooled down to $11.27, up 2.4% from previous close.
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What Is The Market Telling Us
SoundHound AI’s shares are extremely volatile and have had 80 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 7 days ago when the stock dropped 6.6% on the news that investors grew increasingly concerned that the billions of dollars being invested into artificial intelligence may not generate sufficient profits.
This sentiment fueled fears of a potential "AI bubble," leading to a significant downturn in the technology-heavy Nasdaq Composite index. The selloff was intensified after chipmaker Broadcom warned that increased sales of AI systems could lead to thinner profit margins, causing its stock to tumble. Subsequently, the broader market questioned whether the massive spending on chips and data centers would produce a worthwhile return on investment. This uncertainty caused a market recalibration, with investors rotating capital out of more speculative tech stocks and into more stable assets.
SoundHound AI is down 44.1% since the beginning of the year, and at $11.27 per share, it is trading 53.5% 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 $1,502.
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