What Happened?
Shares of voice AI recognition company SoundHound (NASDAQ:SOUN) jumped 17.2% in the afternoon session after the company reported strong fourth-quarter results, surpassing analysts' revenue expectations. Revenue more than doubled year-on-year, reflecting continued growth in its AI voice technology business. However, profitability missed due to a $221 million non-recurring charge. Given the recent sharp declines in the stock, expectations were likely low, and the stock traded up.
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What The Market Is Telling Us
SoundHound AI’s shares are extremely volatile and have had 97 moves greater than 5% over the last year. But moves this big are rare even for SoundHound AI and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 14 days ago when the stock dropped 29.4% on the news that a 13F filing from Nvidia revealed that the chipmaker has sold its stake in the company. The market reaction suggests investors saw Nvidia's involvement as a vote of confidence, and its exit has introduced uncertainty.
SoundHound AI is down 46.9% since the beginning of the year, and at $10.70 per share, it is trading 55.9% 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 $1,426.
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