SoundHound AI Inc (NASDAQ:SOUN) shares are trading lower on Tuesday, pulling back from recent strength. The rally accelerated in November when the company reported strong earnings. Here's what you need to know.
What To Know: SoundHound shares are up more than 875% since the start of the year, buoyed by the company's positioning in the AI space. The stock has nearly tripled since mid-November when the company reported better-than-expected quarterly results, marking its "largest quarter on record."
SoundHound reported a third-quarter loss of 6 cents per share, beating estimates of a loss of 7 cents per share. The company reported revenue of $25.1 million, beating estimates of $23.02 million, according to Benzinga Pro. SoundHound said demand was driven by "incredible market enthusiasm" for conversational AI tools.
SoundHound shares continued to move higher following earnings after Nvidia reported investments in multiple companies, including SoundHound, in a 13-F filing with the SEC. Nvidia's 13F latest filing showed that it increased its stake in SoundHound by about 18% in the third quarter.
Analysts lifted price targets as the stock has continued to trend higher. Last Week, Wedbush analyst Dan Ives maintained SoundHound with an Outperform rating and raised its price target from $10 to $22. On Monday, HC Wainwright & Co. analyst Scott Buck maintained a Buy rating on the stock and raised its price target from $8 to $26.
It's worth noting that SoundHound has high short interest with 24.4% of the float currently sold short, according to data from Benzinga Pro. SoundHound has also been showing up on Benzinga's Stock Whisper Index in recent weeks.
In an exclusive interview on Friday, SoundHound CEO Keyvan Mohajer told Benzinga that AI has moved from the exploratory phase to the mandatory phase for budgets.
"In that context, SoundHound is in a prime position. Our ability to combine proprietary voice AI technology with sophisticated large language models has allowed us to deliver immense value," Mohajer said.
The SoundHound CEO told Benzinga that the company is powering hundreds of global enterprise brands, thousands of restaurant and retail locations and millions of vehicles and devices.
"And we're just getting started," Mohajer said.
SOUN Price Action: SoundHound shares were flat at 0.34% at $20.45 at the time of publication, according to Benzinga Pro.
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