SoundHound AI (NASDAQ:SOUND) The shares are posting big gains in Wednesday’s trading. The conversational artificial intelligence (AI) specialist’s stock price was up 22.9% as of 2:00 PM ET.
The stock is gaining ground in conjunction with a conference call the company is participating in on Wednesday with Northland. The company’s stock price is also likely to have upward momentum thanks to Wedbush’s recent bullish reporting.
SoundHound Chief Financial Officer Nitesh Sharan will participate in a conference call hosted by Northland on Wednesday afternoon, during which he will be interviewed by analyst Mike Lattimore. Investors seemed excited about the prospect of Sharan sharing some new details about the company and its growth pipeline. Sharan has recently participated in other conferences and calls, and these events have sometimes been followed by new rounds of bullish analyst coverage and significant gains for the company’s stock price.
On Monday, Wedbush analyst Daniel Ives published new coverage of SoundHound stock. The analyst maintained an overweight rating on the stock, which equates to a buy rating. Ives also sharply raised his one-year price target for the stock from $10 per share to $22 per share.
Shares of the conversational AI software specialist saw big gains following the note’s publication, and subsequent coverage of the analysis appears to have pushed the stock even higher. On the other hand, the stock is now trading above Ives’ one-year target. At the time of writing, this target actually implies a potential downside of about 8%.
Either way, Ives thinks SoundHound has what it takes to be a long-term winner in the AI revolution. He believes the company is just beginning to take advantage of emerging growth opportunities and will benefit from rising corporate AI spending. Ives expects SoundHound AI’s software will enable the company to enter new business categories and improve monetization.
With Wednesday’s gains, SoundHound AI stock is now up 983% in this year’s trading. While the company may still be in the early stages of its long-term growth trajectory, it is now valued at approximately 106 times this year’s expected revenue. Due to its highly growth-dependent valuation, investors interested in building a position in the stock may want to consider a dollar-cost averaging strategy rather than buying a large number of shares at once.
