SoundHound AI (NASDAQ: SOUN) The stock rose in trading this week. The company’s share price closed this week up 48% from last Friday’s market close, according to data from S&P Global Market Intelligence.
Automobile industry Stellandis extended the integration of SoundHound’s voice-based artificial intelligence (All included) technologies in Europe this week. The growth could be a major sales driver for the voice interface software specialist, and investors have poured into the stock in response.
SoundHound expansion ramps up in Europe
With an update released this week, Stellantis has made its SoundHound voice operating system available in compatible Peugeot, Opel and Vauxhall vehicles, and will now include the technology with new vehicles from those brands. The software integrates OpenAI’s ChatGPT chatbot and has been released for these brands in Germany, France, the UK, Italy and seven other European markets.
By the end of July, SoundHound integration is expected to be launched for Peugeot, Opel and Vauxhall vehicles in a total of 17 European markets. The extended debut follows the integration of production for Stellantis’ high-performance brand DS Automobiles in March.
Apart from these units, the car group also houses businesses such as Chrysler, Dodge, Fiat and Jeep. It’s possible that other automakers under the Stellantis umbrella will move toward incorporating technologies from SoundHound in the not-too-distant future.
What’s next for SoundHound AI stock?
After this week’s explosive earnings, SoundHound’s market cap has soared back above the $2 billion mark. On the other hand, the company’s stock is still down about 30.5% from the 52-week high it hit earlier this year.
SoundHound stock has been extremely volatile amid a wave of excitement surrounding artificial intelligence and uncertainty about the company’s long-term sales prospects. After rising about 192% in 2024 trading, SoundHound is now trading at about 29 times this year’s expected sales.
With its latest quarterly report, SoundHound posted a 73% year-over-year sales increase. The business is showing some impressive momentum, but sales were still relatively small — coming in at $11.6 million in the period. The software specialist also posted a net loss of $33 million in the quarter.
The company appears to be landing and expanding important partnerships, but it remains to be seen whether the company can carve out a defensible moat and fend off competitive pressures. Given SoundHound AI’s valuation profile and speculative outlook, it’s likely that the stock will continue to be highly volatile in the near term.
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Keith Noonan has no position in any of the listed shares. The Motley Fool recommends Stellantis. The Motley Fool has one disclosure policy.
Why SoundHound AI stock soared this week originally published by The Motley Fool
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