SoundHound AI Sees 8.5% Stock Drop Amid Market Volatility

SoundHound AI experiences a significant 8.5% drop in stock price amid market fluctuations. Investors react to fears surrounding Nvidia's upcoming earnings, suggesting a cautious outlook for AI stocks.

Date: 25-02-2025

AI Rating: 5

SoundHound AI's Stock Performance: SoundHound AI's stock has experienced notable volatility, dropping 8.5% recently and as much as 11.9% during trading. While the stock is still 141% higher year-over-year, it has seen a substantial decline of 52.5% in 2025's trading, indicating mixed investor sentiment.

Nvidia's Upcoming Report: The recent drop is attributed to concerns over Nvidia's potential weak fourth-quarter results, prompting investors to reduce exposure to growth-dependent AI stocks. This creates uncertainty in the sector, affecting companies such as SoundHound AI.

Microsoft's Expansion Plans: Additionally, reports that Microsoft will not proceed with certain data center expansions have heightened concerns regarding future growth in the AI market. This combination of factors raises anxiety about SoundHound AI's potential revenue streams.

Future Revenue Growth: On a more encouraging note, SoundHound AI raised its sales forecast for 2024 to between $82 million and $85 million, signifying an anticipated year-over-year sales growth of approximately 82%. For 2025, the projected revenue range sits between $155 million and $175 million, suggesting that sales could more than double year-over-year. This indicates strong growth potential, despite current market challenges.

Valuation Perspective: SoundHound's current valuation at approximately 22.4 times this year's expected sales raises concerns about downside risks, particularly in this volatile market. However, the recent sell-off may have brought the stock to more reasonable levels concerning its growth trajectory.

Stocks: SOUN NVDA MSFT