$SOUN AI Stocks Are On The Rise AgainSmashing its EPS and revenue estimates by $0.17 and $670 million respectively, NVIDIA Corporation (NASDAQ: NVDA) jumped more than 25% in after-hours trading. Almost 60% of the $7.19 billion NVDA recorded in revenue was from AI-related activity and NVDA expects that the vast majority of its sequential increase in revenue in Q2 will come from data centers. After such big news the AI sector could run rampant and SoundHound AI, Inc (NASDAQ: SOUN)is an AI stock that could be setting up for major runs this week.
SOUN Fundamentals
A promising AI stock that could soar in sympathy with NVDA stock is SoundHound AI, Inc. (NASDAQ: SOUN) which expects its addressable market could reach $160 billion in the next 3 years. Given that AI is growing day by day and is getting integrated into almost all industries, SOUN’s expectations do not seem out of possibility.
SOUN mainly operates on a 3 pillar business where in its first pillar it powers devices such as cars, TVs, and IoTs. It is worth noting that SOUN is seeing huge success in this pillar as the number of cars shipped with SoundHound technology more than doubled YoY in Q1.
The second pillar revolves around customer service applications which SOUN is working on expanding by releasing SoundHound Chat AI, its own Large Language Model (LLM). It is expected that SOUN will increase its AutoStore market by more than 10x in the near term which makes SOUN stock an attractive investment in the AI sector. Meanwhile, SOUN’s third pillar is a combination of both the first and the second pillars as it creates a monetization ecosystem that brings the services from pillar two to the products in pillar one.
Through the first pillar, SOUN generates the bulk of its revenues, however, that may change as voice-enabled services are the future in restaurants and customer support-related jobs and are due to fast growth as AI adoption increases. In this way, SOUN expects to realize $43 million to $50 million in revenues in 2023.
While SOUN missed on its revenue estimates in Q1, it only missed by $0.03 million and recorded $6.7 million in revenue. Even if it is not as impressive as NVDA and BBAI, SOUN still finished the quarter with a strong balance sheet of $46 million in cash. It is also worth noting that SOUN gained more than 17% after Microsoft Corporation (NASDAQ: MSFT) released its earnings in late April. Considering the significance of NVDA’s earnings, SOUN stock may replicate its run this week as more investors look to gain exposure to the AI sector.
Technical Analysis
SOUN stock’s trend is bullish with the stock trading in an upwards channel. Looking at the indicators, the stock is trading above the 50 and 200 MAs which are bullish indications, and is currently testing the 21 MA as a resistance. Meanwhile, the RSI is neutral at 54 and the MACD is approaching a bullish crossover.
Following NVDA’s earnings, AI stocks including SOUN stock are expected to soar as NVDA’s earnings highlight the rising demand for AI. In light of this, investors could find a good entry in SOUN stock at the current PPS to capitalize on the growing interest in AI stocks.
SOUN Forecast
AI and AI stocks are hot topics right now. After NVDA announced its extremely positive Q1 and its extremely positive guidance for Q2, it is expected that the AI sector will gain a lot of interest. As SOUN is a relatively cheap AI stock that has a history of running on sector-wide catalysts, it makes the perfect candidate for investors wanting to ride on the AI wave at the moment.
