SoundHound AI Stock Lost 20% Last Month -- Here's How
Shares of SoundHound AI (NASDAQ: SOUN) fell 20.2% in September 2023, according to data from S&P Global Market Intelligence. Many investors lost some confidence in the ongoing artificial intelligence (AI) boom last month. As a small-cap company with deep roots in AI -- it's in the company name, for goodness' sake -- SoundHound took a hard hit from this increased skepticism.
The week of Sept. 17 brought news reports about Chinese AI apps threatening to flood the American market. At the same time, the Federal Reserve held interest rates firm but said it might raise rates one more time before embarking on a slower-than-expected return to lower interest rates next year. That was seen as bad news for high-risk investments, including the fast-growing but unprofitable SoundHound. Lofty interest rates on new debt can be a concrete problem for cash-poor companies in need of new financing.
So these events started a week-long price drop. At the bottom of that slope, SoundHound's share price had fallen 36.5% in September. A bullish analyst note near the end of the month lifted SoundHound's stock back to a milder 20.2% price drop for the full month. In that report, analyst firm DA Davidson set a price target of $5 per share, arguing that SoundHound's AI-powered voice control tools "will set the standard for performance" in that market niche. The stock was trading at $1.75 per share when that analysis was published.
Source Fool.com
