SoundHound AI (NASDAQ:SOUN) investors kicked off the week on a positive note, with shares rising 16% in Monday’s session. That is no rare sight, however, as the stock has seen several similar days throughout 2024. In fact, it has skyrocketed 829% this year.
Pick the best stocks and maximize your portfolio:
- Discover top-rated stocks from highly ranked analysts with Analyst Top Stocks!
- Easily identify outperforming stocks and invest smarter with Top Smart Score Stocks
Yet, for those thinking now might be the wrong time to lean into this high-flying name, Wedbush analyst Daniel Ives has an entirely different idea.
“SOUN is in the early stages of capitalizing on its growth initiatives with enterprise AI demand just starting as this AI spending wave which represents a potential $1 trillion opportunity over the coming years,” Ives opined.
By leveraging its “innovative tech stack” to support diverse Chat AI applications across its three key sectors – automotive, restaurants, and e-commerce – Ives believes the company is a “long-term winner in the AI Revolution.” This approach is also driving growth in its recurring revenue software model and strengthening its position in voice and conversational AI. Simultaneously, the tech stack is enabling expansion into new industries and “improving its monetization capabilities.”
Adding to its momentum, SoundHound has partnered with AI giant Nvidia to introduce voice-generative AI at the edge, eliminating reliance on cloud connectivity – a feature set to debut at CES in January. Furthermore, the company recently launched Polaris, its large language model (LLM) designed for fast data processing and multilingual functionality, which is critical for strengthening enterprise partnerships.
“With a strong tech stack and an improved market opportunity with GenAI moving quickly, SOUN is looking to generate a flywheel effect for its business by cross-selling/ upselling across new and existing logos by delivering innovative AI for enterprises,” Ives went on to explain.
The company has also been busy on the M&A front, and over the past 18 months, has completed three strategic acquisitions – Amelia, SYNQ3, and Allset – thereby broadening its opportunities to deliver voice AI solutions across a wider range of industries.
With the company’s substantial progress and ongoing growth initiatives, Ives views SoundHound as an “under-appreciated pure play AI company” that remains undervalued despite its huge share gains.
Accordingly, Ives rates SOUN shares an Outperform (i.e., Buy), while raising his price target from $10 to a Street-high of $22, implying the stock will deliver additional returns of 12% over the coming months. (To watch Ives’ track record, click here)
Overall, Wall Street’s view on SOUN presents something of a conundrum. On one hand, the stock holds a Moderate Buy consensus rating, based on 3 Buys and 2 Holds. However, even the bulls appear to believe the shares have risen far enough for now, with the average price target sitting at $8.10 – implying a potential 59% decline in the months ahead. It remains to be seen whether other analysts will revise their price targets upward or downgrade their ratings shortly. (See SOUN stock forecast)
To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that unites all of TipRanks’ equity insights.
Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
