SOUN - SoundHound AI: Still Frothy

2024-07-11 08:27:30 ET

Summary

• SoundHound AI's stock bounced, seemingly due to its relationship with Stellantis expanding.
• Demand for AI solutions remains elevated, but SoundHound's organic growth is only modest.
• SoundHound's valuation is high, particularly given uncertainty about the company's long-term competitive positioning.
• Valuation is unlikely to matter while the AI bubble continues to inflate and SoundHound announces new deals.

SoundHound AI ( SOUN ) was up significantly on the 10th of July, presumably due to an announcement related to the rollout of its products with Stellantis (STLA). This news wasn't really a surprise though, given previous commentary around SoundHound's relationship with Stellantis.

SoundHound's business continues to expand at a steady pace, albeit from a very low level, supported by the SYNQ3 acquisition. Absent revenue from the acquisition and non-recurring revenue, SoundHound's growth doesn't look that strong....

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