SoundHound AI (NASDAQ: SOUN) stock took a hit today, dropping 8% by mid-morning trading. This decline came after a note from Northland analyst Michael Latimore, who downgraded the stock from outperform to market perform.
Despite the recent pullback, SoundHound AI’s stock has skyrocketed by around 240% in the last month. The surge was driven by the company’s advancements in artificial intelligence (AI) technology, as well as the news that Nvidia (NASDAQ: NVDA) holds a stake in the company.
Northland’s cautionary stance is due to the stock’s rapid valuation increase. While the company has exciting opportunities on the horizon, investors are advised to consider the risks associated with the stock’s current valuation.
One of the key drivers of SoundHound AI’s recent gains was Nvidia’s disclosure of its stake in the company. However, the investment is relatively small for Nvidia, who made it back in 2017.
Looking ahead, SoundHound AI is set to announce its fourth-quarter results on Thursday, providing investors with a clearer picture of the company’s performance and future outlook.
While SoundHound AI has shown potential for growth, it’s essential for investors to carefully assess the risks before diving in. The company’s volatility, driven by its position as an AI player, makes it a stock to watch closely in the coming months.
