SoundHound AI (NASDAQ: SOUND) stocks post explosive gains in Friday trading. The conversational artificial intelligence (AI) company’s stock price was up 24.5% as of 3:15 PM ET.
Shares of SoundHound AI are rising today after the company was named a leader in Frost & Sullivan’s 2024 Frost Radar Report. Specifically, the company’s Amelia platform was named a leader in conversational AI for enterprise healthcare.
Frost & Sullivan published its 2024 Frost Radar report yesterday, and SoundHound AI’s stock price is seeing huge bullish momentum thanks to positive coverage of the company’s Amelia platform in the report. Frost & Sullivan expects the healthcare conversational AI market to grow to $2.34 billion in annual revenue by the end of 2027. The company’s report shows that this part of the market will grow at a compound annual growth rate (CAGR) of 17.2% over the coming years. end of that forecast period.
Frost & Sullivan principal analyst Nitin Manocha said SoundHound’s Amelia platform stands out for its performance and innovation pipeline. The company acquired Amelia in September for $80 million, and Manocha believes the integration of SoundHound’s voice AI capabilities into Amelia’s enterprise platform opens the door to tremendous growth opportunities.
To date, SoundHound AI’s main business sources have been in categories such as restaurants and automotive. Along those lines, the company announced on December 11 that it would bring its AI ordering and customer service software to Church’s Texas Chicken restaurants. Last week, the conversational AI specialist announced it would be bringing its software to Torchy’s Tacos.
Frost & Sullivan’s positive coverage of SoundHound AI’s position in the enterprise healthcare market highlights an important new growth opportunity for the company. The company is still in the very early stages of capitalizing on potential growth in the category, and it is possible that it could quickly become a key performance driver.
Recent contract wins and coverage of emerging opportunities have contributed to an incredible bull run for the company. The share price is now up 703% in this year’s trading, and the company is undeniably seeing encouraging adoption momentum.
On the other hand, the big gains for the stock mean the company is now valued at around 75 times this year’s expected revenue. With such a highly growth-dependent valuation, investors should understand that the explosive potential of SoundHound AI stock also comes with a high degree of risk.
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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
Why SoundHound AI Stock Is Soaring Today was originally published by The Motley Fool
