The SoundHound AI stock price has been falling since the previous month. The reason assumed by experts is the artificial intelligence burnout, as it has come down to $4.0 from a price of $10.23 at the start of the year.
The persistent decrease in the stock price is happening at the same time when other AI stocks are also shedding, like Nvidia, Super Micro Computer, and the processor maker AMD. According to the experts, the SoundHound stock crash has decreased the valuation of the company by $1.5 billion since it started its free fall in March.
AI stock burnout
There is a feeling of exhaustion among bulls for AI stocks due to various factors. The first thing that comes sight is the general weariness in the artificial intelligence industry, along with AI based cryptocurrencies such as Ocean Protocol, Singularity AI, and Fetch AI, as they all have also decreased in value.
SoundHound’s valuation is also triggering concerns among investors, as despite the recent stock reversal, the company’s recent valuation is $1.26 billion. The company has incurred a loss of more than $88 million for the last year, which is also a pressing concern.
The price to sale ratio is also very high for SoundHound if compared to other companies like AMD and Nvidia, as it trades at a ratio of 32x. The expected revenue, according to market experts, is $69 million, and market analysts expect further growth to $25 million by 2025. So it brings us down to a P/S ratio of 14, which is considered expensive by a big margin.
Analysts are still bullish on SOUN and some other AI stock
The positive indicator is that SoundHound stock has traded above the exponential moving average of the last 200 days (EMA). It has also been trading near the oversold region above index 60, so a rebound is not out of the question as investors may be waiting to buy a dip.
But SoundHound can be expected to perform better despite these valuation benchmarks, as companies like Nvidia, which is trading at a forward PE ratio of 34, are still performing better across the markets.
Marlet analysts still expect better outcomes from the SoundHound stock price, as they estimate the stock to reach $7.15, which is quite higher than the current price of 4.9. The stock has also been upgraded to neutral by Fitzgerald’s analysts. Other analysts are also bullish on SOUN stock, for example, Wedbush, DA Davidson, and Wainwright.
SoundHound share price can change with changes in some important market catalysts, among them, earning reports from the AI and semiconductor sectors will play a major role. As Nvidia is expected to publish its income results later this week, and also AMD and SMCI. This can have a positive impact on the share price.
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