Is SoundHound AI Stock a Buy After Today's Big Drop?
After a massive run higher earlier this year, SoundHound AI (NASDAQ: SOUN) stock has come back to earth. That correction included a decline of about 8% just today as of midday trading. Yet shares have still more than doubled in 2024.
Now that the momentum has eased, investors might be wondering if the stock-price decline is an opportunity to own a piece of the maker of voice artificial intelligence (AI) technology. Yet even as sales have been growing with more companies utilizing conversational AI Chatbots, the news that moved the stock today is the reason investors should pause before jumping into the stock.
The company said in a Securities and Exchange Commission filing that it had reached agreements to sell up to $150 million in stock to raise fresh capital. That's a meaningful amount of additional stock for a company with a market cap under $1.5 billion. The new at-the-market equity program could result in about 10% total dilution for existing shareholders, which is why investors reacted negatively to the news today.
Source Fool.com
