What Happened?
Shares of voice AI technology company SoundHound AI (NASDAQ: SOUN) fell 5.6% in the morning session after broader weakness in the artificial intelligence sector weighed on the stock as tech giant Oracle raised investor concerns about an AI bubble.
Oracle issued a weak revenue outlook and increased its spending forecast, which intensified scrutiny around the high costs associated with AI technology. This news sparked worries about whether the significant investments in AI across the industry would pay off, leading to a sell-off in related stocks. Compounding the negative sentiment for SoundHound AI, prominent market commentator Jim Cramer stated that the company did not make any money, adding to investor concerns about its financial footing amidst the sector-wide pressure.
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What Is The Market Telling Us
SoundHound AI’s shares are extremely volatile and have had 85 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 2 days ago when the stock dropped 0.9% on the news that the stock extended its year-to-date losses amid signs of growing investor skepticism. The move contributed to a difficult year for the voice AI company, with reports highlighting that shares had already dropped around 36% since the start of the year. This performance trailed its industry peers and the broader market. The decline occurred as the company, once popular with retail traders, faced increasing doubt from investors. SoundHound's drop was more significant than the slight dip seen in the wider tech sector during the session.
SoundHound AI is down 42.1% since the beginning of the year, and at $11.67 per share, it is trading 51.8% 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 $1,557.
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