SoundHound AI (NASDAQ: SOUND) Stock prices are rising in Thursday’s trading. The conversational artificial intelligence (AI) company’s stock price was up 30.1% as of 1:00 PM ET. At the time of writing, the S&P500 index was flat, and the Nasdaq Composite the index rose by 0.2%.
SoundHound AI’s valuation is rising today on news that the company’s AI ordering and customer service technologies are being rolled out at Torchy’s Tacos. The stock is now up 157% in the past month.
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SoundHound issued a press release today announcing that its AI Smart Ordering service had gone live at Torchy’s Tacos. The service has been introduced at all of the company’s 130 restaurant locations. SoundHound’s conversational AI software is trained on Torchy’s menu and has the capacity to manage 100% of the restaurant’s incoming calls and handle questions about menu items, special offers, hours and allergen information. The use of the AI software will in turn allow Torchy’s staff to focus on food preparation and providing in-store service.
While today’s explosive gains for SoundHound AI stock were fueled by the announcement of the service rollout at Torchy’s Tacos, there’s a fundamental element that could play an even bigger role in the stock’s gains. SoundHound AI has gained popularity as a meme stock, and its stock price has often seen big moves after little or no relevant news.
Landing a new contract with Torchy’s is certainly a bullish development, and the increasing adoption underlines the value and potential of SoundHound’s software. On the other hand, bridging the conversational AI ordering software to 130 new restaurant locations isn’t the kind of announcement that would normally be expected to trigger such explosive share price gains. While the stock could continue to climb higher on the meme-fueled momentum, the recent gains raise some significant valuation concerns – and there’s a good chance the stock will be highly volatile in the short term.
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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
