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SoundHound AI (NASDAQ: SOUN) went public in spring 2022 via a SPAC merger, raising $90.7 million. Despite the generative AI boom that began with the release of ChatGPT 3.5 in November 2022, SoundHound’s stock initially rose just 42%, trailing behind major AI players like Nvidia, which soared 194%.
In early 2024, Nvidia’s small investment in SoundHound caused its stock to quadruple, peaking above $24 per share. However, the stock has since declined and currently stands near $10, down 62% from its late December 2024 peak. The short-sale interest remains high at 32%, making it one of the most shorted stocks on the market.
SoundHound’s trailing sales have increased to $102 million from $51 million a year ago, although it reported a negative free cash flow of $107 million over the past four quarters. A target share price of $6 may be too strict as the company continues to acquire clients and sign multiyear contracts.
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