SoundHound AI (NASDAQ: SOUND) Stocks saw another day of explosive gains in Friday trading. The conversational AI company’s share price closed the day about 12.5% higher.
While there was no direct business news today that pushed SoundHound AI shares higher, the company’s stock price gained ground in tandem with news from other corners of the artificial intelligence (AI) market. The software specialist is now up 600% in 2024 trading.
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Artificial intelligence stocks saw widespread bullish momentum today, along with developments in the space. For starters, newly elected President Donald Trump has announced that he plans to appoint venture capitalist David Sacks as his administration’s AI and crypto czar. This move indicates that the new administration is likely to make AI a top priority.
Yesterday, OpenAI also announced the launch of its o1 reasoning model and a $200 monthly subscription for its new ChatGPT Pro service. SoundHound AI’s in-car audio software platform features ChatGPT integration, and it’s likely that new feature support from the AI leader will eventually make its way into the audio software specialist’s in-car offering. More broadly, OpenAI’s move to price its new ChatGPT software at $200 per month has investors optimistic about the monetization potential in the AI space.
Artificial intelligence was the hot topic in 2024, and no stock was hotter than SoundHound AI. Its returns have outperformed all other major AI stocks recently, and the gains have pushed the company’s market cap to about $5.4 billion. It has also become more expensive.
SoundHound AI stock is now valued at about 64 times this year’s expected revenue. While the company has grown its revenue at a rapid pace and still has major growth opportunities ahead, investors should understand that the company’s highly growth-dependent valuation sets the stage for downside risks if growth does not meet expectations or if macroeconomic and political conditions develop in less favorable circumstances. directions. If you’re considering investing in SoundHound AI, using a dollar-cost averaging approach based on volatility may be the right move.
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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 Soared Higher Again Today was originally published by The Motley Fool
