With today’s gains, SoundHound AI stock is now up more than 1,000% in 2024.
SoundHound AI (SOUN 21.57%) stock is posting big gains in Thursday’s trading. The company’s share price was up 17.9% as of 12:30 p.m. ET.
SoundHound AI stock is surging amid a day of strong momentum for meme stocks. Speculative growth plays are seeing a strong rebound on the heels of recent valuation volatility, and the conversational artificial intelligence (AI) is also getting a boost from bullish analyst coverage.
SoundHound AI stock surges to new high
After valuation pullbacks that occurred in conjunction with news that the Federal Reserve only expects to deliver two interest rate cuts next year, speculative growth stocks are seeing strong rebound momentum. With today’s gains, SoundHound has notched a new high and is up more than 1,000% across 2024’s trading — a rally that makes it one of the year’s best-performing stocks.
With speculative growth stocks seeing strong bullish momentum, investors appear to be bidding SoundHound up with recent bullish coverage from analysts in mind. On Monday, H.C. Wainwright published new coverage on the stock that maintained a buy rating and raised the firm’s one-year price target from $8 per share to $26 per share. While the firm’s analysts noted that recent valuation gains have been driven by market excitement, they believe that the company will perform well enough to support its growth-dependent valuation.
What comes next for SoundHound AI stock?
With today’s gains, SoundHound’s market capitalization has been pushed up to roughly $8.8 billion. The company is now trading at approximately 105 times this year’s expected sales.
SOUN PS Ratio (Forward) data by YCharts
SoundHound’s conversational AI services suggest highly scalable business opportunities, and it’s likely that demand for this kind of software will continue to increase rapidly over the long term. On the other hand, investors should keep in mind that the stock’s highly growth-dependent valuation opens the door for high levels of volatility if growth falls short of expectations or macroeconomic conditions take a turn for the worse.
Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
